Judge Upholds Conviction of North Carolina Insurance Magnate in Bribery Case

August 10, 2020

A federal judge has upheld the convictions of two men found to be trying to bribe North Carolina’s top insurance regulator with large political contributions so that scrutiny of a defendant’s businesses would be eased.

A jury in March found Greg E. Lindberg, an insurance magnate and big political donor, and Lindberg consultant John Gray guilty of conspiracy to commit honest services wire fraud and bribery. No sentencing dates have yet been set.

The two men asked U.S. District Judge Max Cogburn, who presided over the case, to order acquittals or a new trial, challenging a host of elements within the three-week trial, including jury instruction and evidence. Late Tuesday, Cogburn denied their motions, writing that “contrary to the defendants’ assertions, the law and evidence supported that verdict.”

Gray and Lindberg also challenged their attorneys’ limitations in questioning state Insurance Commissioner Mike Causey, who evidence showed was the intended beneficiary of the political donations. Causey, who wasn’t accused of wrongdoing, alerted authorities and cooperated in the case against Lindberg, recording conversations with the two defendants and others.

Evidence showed Lindberg offered to funnel money for Causey’s 2020 reelection campaign in exchange for the removal of an official regulating his insurance companies. The recording transcripts show Lindberg supporting the establishment of two independent expenditure committees funded with $1.5 million to support Causey’s campaign, according to Cogburn’s ruling.

The judge also rejected the defendants’ arguments that they were unlawfully entrapped by Causey and the government. Prosecutors “presented ample evidence for the jury to find that the defendants were predisposed to commit the offenses, as they were ready and willing to offer a bribe when given an opportunity,” Cogburn wrote.

In a separate ruling last week, Cogburn also ordered the forfeiture of $1.45 million within the independent expenditure committees. Lindberg wrote $1.5 million in checks for the accounts, according to evidence. Appeals are possible.

Former Lindberg company employee John Palermo, who also was indicted in the case, was acquitted by the trial jurors.

A fourth person indicted in early 2019, ex-state GOP Chairman Robin Hayes, pleaded guilty last October to lying to investigators and is awaiting sentencing. Prosecutors said Hayes caused the transfer of another $250,000 in Lindberg contributions from the party’s coffers to benefit Causey, a Republican.

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