Prosecutors urge judge to reject Greg Lindberg petition for a new trial

Federal prosecutors say the second prosecution of Greg Lindberg on bribery charges was free of errors and the court should reject the defendant's request for a new trial.

Lindberg is trying to best the government a second time in challenging his May conviction. Convicted in 2020 on bribery and fraud charges, along with associate John Gray, Lindberg served 633 days behind bars before the conviction was vacated due to improper jury instructions.

In his late-May motion, Lindberg asks for acquittal, or a new trial, on his conviction for bribing North Carolina Insurance Commissioner Mike Causey. The definition of what constitutes "an official act" forms the basis for Lindberg's appeal.

Prosecutors say Lindberg and Gray gave, offered, and promised Causey millions of dollars in campaign contributions and other things of value in exchange for the removal of his senior deputy commissioner, who was responsible for overseeing the regulation and the periodic examination of Lindberg’s Global Bankers Insurance Group.

“In this case, the government has stretched the federal bribery statutes beyond their breaking point,” the motion reads. “It has taken the position that the mere reassignment of work from one deputy commissioner to another—without any proof Mr. Lindberg sought a different outcome on the Department of Insurance’s review of his businesses—qualifies as an ‘official act’ or the ‘business’ of the Department. The government is badly mistaken.”

'We'll get Debbie Walker'

In its response this week, the government reminded the court of the context in which Lindberg requested a new senior deputy commissioner. Causey wore a recording device while meeting with Lindberg, who sought to replace then-deputy insurance commissioner Jackie Obusek with Debbie Walker.

"[D]uring the final recorded meeting with Commissioner Causey on July 25, 2018, Lindberg again set forth the agreement and action items to be accomplished: 'Ok, so resolved. You’ll [Gray] get on the horn with Robin [Hayes] right away. Get that check over to [the Commissioner] now. And then by the end of August we’ll get [the Commissioner] the balance, and we’ll get Debbie Walker,'” the government's response reads.

Then chairman of the North Carolina Republican Party, Robin Hayes helped coordinated the payoffs to Causey. He pleaded guilty and was given probation.

Lindberg, founder of the private equity firm Eli Global, eventually acquired several insurers and grouped them together as the Global Bankers Insurance Group. Insurance profits soared and ultimately enabled Lindberg to funnel $2 billion to Eli Global, according to a Wall Street Journal report. That attracted regulators and initiated Lindberg's downfall.

Lindberg made a special agreement with former insurance commissioner Wayne Goodwin allowing him to invest up to 40% of his insurance companies' assets into affiliated business entities. In November 2016, Goodwin lost his seat to Causey, who reduced the cap on affiliated investments from 40% to 10%.

The government pointed out that Lindberg and Gray mentioned several times that they were closing in on the purchase of a Nebraska insurance company they wanted to redomicile in North Carolina.

“[O]ne of the things that really needs to happen, it would be very helpful to get domesticated companies in North Carolina, is that thing with Debbie Walker," Gray said, according to the government's response.

Reached Wednesday about the government's rejection of his claims, Lindberg said: “Our motion for acquittal or new trial contains all the rebuttal arguments and we stand by this motion.”

Mistaken jury instructions

In a June 2022 ruling, the Fourth Circuit Court of Appeals said that the trial judge improperly lowered the prosecution’s burden of proof by telling the jury that the staffing change was an “official act,” one of the elements of the fraud conspiracy charge.

Only a jury can make that determination.

"Again, many of the reasons the jury’s verdict was properly supported with respect to their finding on 'official act' apply with equal force here. As discussed above, the matter at issue – the removal and replacement of Ms. Obusek as the Senior Deputy Commissioner – was concrete and circumscribed and was treated by the defendants themselves as an action item to be tracked," the government's response says.

Lindberg and Gray face 30 years in prison. A presentence investigation report for Lindberg was filed under seal last week.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.