New indictment accuses NC billionaire Greg Lindberg of misappropriating millions [The Charlotte Observer]

Charlotte Observer (NC)

Beleaguered N.C. billionaire Greg Lindberg, already facing retrial on accusations that he tried to bribe a state official, was indicted Friday on a rash of new criminal charges that further threaten his freedom.

The 48-page, 13-count indictment handed down by a federal grand jury in Charlotte accuses the Durham business magnate and two co-conspirators of illegally siphoning vast amounts of money from Lindberg’s insurance companies for his personal use, then lying to regulators to hide their $2 billion scheme.

Since 2019, multiple insurance companies controlled by Lindberg have been placed into rehabilitation or liquidation, prosecutors claim, while thousands of policyholders have been defrauded.

Lindberg, 53, is specifically charged with one count each of conspiracy to defraud the United States, money laundering conspiracy, and wire fraud; four counts of making false insurance business statements to regulators; and six counts of making false entries about the financial conditions or solvency of an insurance business.

The case was investigated by the Charlotte office of the FBI.

The money laundering and wire fraud charges alone carry maximum punishments of 20 years in prison; the conspiracy to defraud the government count, 10 years. The illegal activity allegedly took place between 2016 and 2019.

“The indictment reveals a carefully orchestrated scheme that relied on a web of complex financial investments and transactions designed to evade regulators, disguise the financial health of Lindberg’s insurance companies, and conceal the alleged purpose of the scheme: Lindberg’s personal gain,” U.S. Attorney Dena J. King of Charlotte said in a statement following the release of the indictment.

In 2017-18, for example, Lindberg and his co-conspirators used a series of loans and related transactions to skim “hundreds of millions of dollars” from his insurance companies to buy and operate other Lindberg firms, according to indictment.

Lindberg, according to prosecutors, also spent generously on himself by either purchasing or refinancing homes and real estate and “forgiving” more than $125 million in loans from his companies to himself.

In December, when the new allegations against Lindberg first surfaced in a related criminal case, he called the government’s claims “entirely absurd.”

“I invested over $500 million in my insurance companies,” he said in a statement. “I never took a penny of dividends. The allegation that I somehow defrauded them while investing $500 million in them and taking no dividends is entirely absurd.”

Lindberg spokeswoman Susan Estrich on Friday accused the government of “piling on,” saying the government brought the new charges because it fears losing the retrial of its corruption case against Lindberg later this year.

“The latest charges stem from the government’s spending over five years going through over 7 million documents on literally thousands of complicated financial transactions involving over 900 companies and handpicking alleged technical violations which have not caused any loss to policyholders in North Carolina or any other state for that matter,” Estrich said.

SEC lawsuit

Lindberg’s legal problems have been billowing for months. In August, the federal Securities and Exchange Commission sued Lindberg and Christopher Herwig, Lindberg’s former chief investment officer at his flagship investment firm, Eli Global, alleging multiple violations of financial regulations.

In a related financial fraud criminal case that quietly surfaced in the Charlotte federal courts just before Christmas, Herwig pleaded guilty to conspiracy to defraud the United States and is expected to testify against his former boss.

The allegations in the Herwig case track those in the new indictment: that Herwig, joined by an unnamed but clearly identifiable Lindberg and another Eli Global employee, Devin Solow, used a series of complex and overlapping investment vehicles to illegally move hundreds of millions of dollars through Lindberg’s multi-national maze of business holdings.

Solow also has been charged with conspiracy to defraud the United States.

NC bribery scheme

Friday’s indictment surfaces while Lindberg awaits retrial on charges that he attempted to bribe State Insurance Commissioner Mike Causey in return for friendlier regulatory oversight from Causey’s staff.

Prosecutors say Lindberg — whose contributions to both parties once made him the state’s largest political donor — and an associate funneled some of the money through the state Republican Party and its then-chairman, former U.S. Rep. Robin Hayes of Concord. Hayes pleaded guilty to avoid jail time and was later pardoned by then-President Donald Trump.

In 2020, a federal jury in Charlotte found Lindberg guilty of the public-corruption charge, and he was sentenced to 87 months in prison.

In June, the Fourth Circuit Court of Appeals threw out the conviction and ordered a new trial after finding that U.S. District Judge Max Cogburn gave improper instruction to Lindberg’s jurors before they began deliberating. Lindberg was freed after serving two years in prison.

His new bribery trial was set to begin early next month in Charlotte. It has since been delayed and rescheduled for November.