A federal grand jury in Charlotte returned an indictment yesterday charging a North Carolina man with organizing and directing a massive scheme to defraud state insurance regulators and defraud thousands of policyholders and others in connection with insurance companies he controlled.
According to court documents, from no later than 2016 until at least 2019, Greg E. Lindberg, 53, of Durham, and others allegedly conspired to defraud various insurance companies, other third parties and ultimately thousands of insurance policy holders. Lindberg is alleged to have defrauded the North Carolina Department of Insurance and other regulatory authorities, evaded regulatory requirements intended to protect policyholders, concealed the true financial condition of his insurance companies, and misused insurance company funds to his own personal gain. Specifically, the indictment alleges that Lindbergh personally benefited from the fraud in part by using funds from the insurance company to finance his lavish lifestyle, including buying and refinancing personal real estate and “forgiving” more of $125 million in loans from its subsidiaries to itself.
“Insureds rely on insurance company owners to follow the rules so that the benefits they deserve and depend on are available when needed,” said Assistant Attorney General Kenneth A. Pollitt, Jr. of the Justice Department’s Criminal Division . “In this alleged $2 billion scheme, the defendant defrauded both regulators and policyholders, causing significant financial harm to thousands of victims. As this prosecution demonstrates, no matter how complex the scheme, the department will hold accountable corporate executives whose crimes leave policyholders holding the bag while they line their own pockets.
The alleged conduct allegedly caused significant financial hardship to the victims. Lindbergh allegedly caused insurance companies to take on nearly $2 billion in investments as part of his scheme, most of which remained outstanding as of September 2022. As of 2019, multiple insurance companies controlled by Lindbergh have been placed in rehabilitation or liquidation.
“The indictment reveals a carefully orchestrated scheme that relied on a web of complex financial investments and transactions designed to evade regulators, conceal the financial condition of Lindbergh’s insurance companies, and conceal the alleged purpose of the scheme: Lindbergh’s personal gain,” said the US Attorney. Dena J. King for the Western District of North Carolina. “My office will continue to work with our law enforcement partners to investigate and prosecute financial abuse and hold perpetrators accountable for their actions.”
“People buy insurance products to provide comfort and security. However, the indictment alleges that this was an elaborate and complex scheme designed for one reason to benefit Lindbergh,” said Acting Special Agent in Charge Michael S. Sherk of the FBI’s Charlotte Field Office. “The FBI is steadfast in its efforts to bring to justice those who commit federal financial crimes.”
Lindbergh is charged with one count each of conspiracy to commit crimes in connection with the insurance business, bank fraud and investment adviser fraud; one count of wire fraud; four cases of false insurance activity reports submitted to regulators; six counts of falsifying records regarding the financial condition or solvency of an insurance business; and one count of conspiracy to commit money laundering. If convicted, he faces a maximum sentence of 20 years in prison on each of the main charges.
In December 2022, one of Lindbergh’s top executives, Christopher Herwig, pleaded guilty in a related case to conspiring with Lindbergh and others to commit wire fraud, defrauding an investment adviser and money laundering, as well as making false statements in the insurance business.
Separately, Lindbergh remains indicted and awaits a retrial in the case in which he faces several charges stemming from alleged attempts to bribe the commissioner of the North Carolina Department of Insurance.
The FBI’s Charlotte office is investigating the case.
Assistant U.S. Attorney Daniel Ryan for the Western District of North Carolina and Trial Attorney Lindy Freeman of the Criminal Division’s Fraud Unit are prosecuting the case.
If you believe you are a victim in this case, please contact the Fraud Unit’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected] We also encourage you to visit our web page for this case at https://www.justice.gov/criminal-vns/case/united-states-v-greg-e-lindberg.