May 7, 2024

Greg Lindberg back on trial for alleged bribery of insurance commissioner

Troubled financier Greg Lindberg faces a second trial on high-profile bribery allegations starting Tuesday.

Lindberg was convicted in 2020 on bribery and fraud charges, along with consultant John Gray. They were caught on tape offering North Carolina Insurance Commissioner Mike Causey up to $2 million to replace the deputy in charge of monitoring Lindberg’s companies.

Lindberg served 633 days of an 87-month sentence, and later wrote a book about the experience.

A June 2022 ruling by the Fourth Circuit Court of Appeals vacated the conviction. The appeals court ruled 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.

Both the prosecution and defense attorneys had objected to the jury instruction. Chief Circuit Judge Roger Gregory wrote: the U.S. Supreme Court “clearly” considers the question of what constitutes an official act to be one for the jury, Reuters reported.

In its appeal, the government argued the error was harmless. But the Fourth Circuit said it directly affected the fraud count and may have “effortlessly bled” into the jury’s consideration of the bribery count, requiring a new trial on both charges.

In a final ruling before the new trial, District Judge Max Cogburn rejected Gray’s motion to sever his retrial from Lindberg’s. Federal prosecutors objected to that request.

Lindberg faces a host of additional lawsuits and fraud charges, which Gray argued prejudice his ability to receive a fair trial. Cogburn disagreed.

“The charges against the defendants are identical,” Cogburn wrote last month. “Thus, there is no concern that there will be a ‘spillover’ effect on a defendant charged with lesser crimes that his co-defendant.”

Fallen empire

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%.

Lindberg was indicted in February 2023 on federal fraud charges. The 48-page indictment handed down by a federal grand jury in Charlotte accuses 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.

Lindberg 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.

Cogburn ordered a delay in the trial on the new fraud charges until after Lindberg’s bribery retrial.

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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