November 16, 2023

Greg Lindberg accomplice settles with insolvent insurers for $75k

A top executive to disgraced financier Greg Lindberg agreed to settlement terms with four insurance companies once owned by Lindberg and now in liquidation.

Settlement terms call for Christopher Herwig, who the Securities and Exchange Commission accused of teaming with financier Lindberg to defraud investors of $75 million, to pay $75,000 to the insurance companies to resolve their civil lawsuit.

The plaintiffs – Southland National Insurance Corp., Colorado Bankers Life Insurance Co., Bankers Life Insurance Co. and Southland National Reinsurance Corp. and relevant liquidators – have been trying to unwind Lindberg’s business empire since his financial troubles began in 2019. Meanwhile, thousands of policyholders wait for their frozen funds.

Herwig previously pleaded guilty to a variety of criminal charges, including money laundering, wire fraud, conspiracy and investment adviser fraud in connection with the case.

The consent agree filed this week calls on Herwig to retain all evidence, documents, and other information relevant to the Lindberg case. More importantly, Herwig “agree to assist the plaintiffs in recovery of assets,” court documents say.

Also, Herwig agrees to a consent judgment in the amount of $2 million, which “shall not be … utilized for collection unless this court determines that Defendant Herwig was materially untruthful.”

Greg Lindberg’s top exec

Herwig worked for Lindberg on an alleged scheme to siphon off millions of dollars from a number of insurance companies through a series of loans and other transactions, then using the money to acquire and operate other companies, according to court documents.

The SEC complaint names a Malta-based registered investment adviser, Standard Advisory Services Limited, and two top executives: Lindberg and Herwig.

From July 2017 through 2018, according to court documents, Lindberg and Herwig violated their fiduciary oath to advisory clients by fraudulently causing them to engage in undisclosed related-party transactions that were not in their best interest.

Lindberg was freed from prison last summer after serving nearly two years on a conviction for attempting to bribe North Carolina Insurance Commissioner Mike Causey. The federal government intends to retry Lindberg on those charges. Lindberg had been sentenced to more than seven years after being convicted of attempting to bribe Causey to secure preferential regulatory treatment for his insurance business.

The 4th Circuit panel declared that Judge Max Cogburn had erred by giving jurors in Lindberg’s trial misleading instructions before they began deliberations.

Finally, Lindberg was indicted in February on federal fraud charges. He lost an appeals court decision this summer that could expose him to millions in damages.

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.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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