Court names special master to unwind Greg Lindberg’s holdings, pay victims
A North Carolina federal court appointed a special master team to unwind Greg Lindberg’s financial empire and reimburse his victims.
District Judge Max O. Cogburn, Jr. named bankruptcy attorney Joseph Grier of Grier Wright Martinez PA to serve as special master. Scott Avila of Paladin Management will serve as the special master’s financial advisor, according to an order filed with the U.S. District Court for the Western District of North Carolina.
Lindberg, who pleaded guilty in November to engineering a $2 billion fraud, did not respond to a message seeking comment.
“To assist in meeting his restitution obligations” Lindberg has agreed to take “all necessary and reasonable steps” to turn over control of several key assets to the special master within 21 days of Thursday’s order. Those assets, which Lindberg of his entities have an “economic or controlling interest” are: AAPC Holdings and New Hold Co. and the Specified Affiliated Companies.
“Defendant has also agreed to refrain from taking and/or cease taking any actions identified by the special master as interfering with the special master carrying out his/her duties,” the order states.
Massive fraud
Lindberg’s November plea satisfied a 48-page indictment handed down by a federal grand jury in February 2023. It accused Lindberg 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.
“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,” said U.S. Attorney Dena J. King at the time of the indictment. “People buy insurance products to provide comfort and security. However, this indictment alleges this was a sophisticated and intricate scheme designed for one reason, to benefit Lindberg.”
Lindberg faced 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 Charlotte office of the FBI investigated the case. The money laundering and wire fraud charges alone carry maximum punishment of 20 years in prison; the conspiracy to defraud the government count, to 10 years.
“As part of his plea agreement, Mr. Lindberg has pledged to ‘take all necessary and reasonable steps’ in his power to secure assets sufficient to pay full restitution to the policyholders of his insurance companies ‘no later than 30 days after the issuance of the initial draft presentence report issued by the United States Probation Office in this matter.'”
In addition, Lindberg was convicted for a second time in May of trying to bribe North Carolina Insurance Commissioner Mike Causey to secure more favorable treatment for his insurance companies.
Life insurance victims
On June 27, 2019, Southland National Insurance Corp., Colorado Bankers Life Insurance Co., Bankers Life Insurance Co., and Southland National Reinsurance Corp. – all owned by Lindberg – were placed in rehabilitation by order of the Superior Court of Wake County, North Carolina.
Since then, regulators have worked to unwind the complex financial web of companies and accounts controlled by Lindberg.
The special master will “verify and quantify the losses suffered by each victim and any amounts already received by each victim to compensate for such losses,” the order reads.
Grier and Avila will also “identify all assets available for liquidation and/or repatriation for the benefit of the victims, including any assets held by” Lindberg companies that include GBIG Capital, GBIG Holdings, PBX Holdings, PBX Bermuda Holdings, BMX Holdings, and BMX Bermuda Holdings.
The special master will determine “to the extent those assets are not readily convertible to cash, determine a reasonable estimated value for those assets,” the order states. Grier is also charged with distributing any funds to victims on a timetable he will create.
There is no timeline for the special master to carry out his duties, but interim reports will keep the court updated on the restitution efforts, the order says.
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