A North Carolina court has ordered jailed insurance and business entrepreneur Greg Lindberg to relinquish control of hundreds of his firms in a plan to salvage four of his insurance companies.
The judge in Wake County found that Lindberg committed fraud and failed to abide by a 2019 agreement after the North Carolina Department of Insurance took control of the insurers, the Wall Street Journal and other news outlets have reported.
State Insurance Commissioner Mike Causey said the ruling is a big win for policyholders. The department “will continue to work to hold Mr. Lindberg to his promises and get the policyholders of these companies full access to their policies,” he said, according to the Journal.
Lindberg is now serving a seven-year sentence in federal prison after being convicted of attempting to bribe Causey in exchange for favorable treatment for his insurance companies.
Lindberg had struck an agreement with a previous commissioner to allow him to invest as much as 40% of the carriers’ assets into his affiliated companies. Causey, who took office in 2017, deemed the investment plan to be too risky. Lindberg attempted to influence Causey’s decision, but the commissioner alerted authorities and recorded conversations with Lindberg, according to prosecutors.
Lindberg has denied the charges but was convicted in 2020.
The case also ensnared a former North Carolina Congressman, Rep. Robin Hayes, who pleaded guilty in 2019 and was pardoned by former President Donald Trump just days before Trump left office in 2021.
On Wednesday, Lindberg lost control of most of his far-flung business enterprises. North Carolina Judge Graham Shirley said Lindberg had deceived and defrauded the insurance companies by investing even more than 40% of their assets in his other operations. After the state took control of the insurers under a 2019 agreement, Lindberg continued to withdraw more from the insurers than the stipulations allowed. His other operations had obtained millions of dollars in loans from the insurance companies but didn’t turn over control of his operating companies as called for in the agreement, the judge said.
Most of Lindberg’s businesses will now be put under control of a special overseer board, which will have the authority to sell the companies to repay the insurers money they were owed, which could be as much as $1.25 billion, the judge’s order notes.
The insurance companies involved are Southland National Insurance Corp., Bankers Life Insurance Co., Colorado Bankers Life Insurance Co. and Southland National Reinsurance Corp., according to news reports. Many of Lindberg’s affiliated companies were under the name Eli Global, which has since changed its moniker to Global Growth Holdings.
The ruling is the latest round of bad news for the entrepreneur, who once controlled hundreds of small and mid-sized businesses, including eye-care chains and software firms. Earlier this month, a federal judge ordered Lindberg to repay $524 million to a Puerto Rico insurance company whose assets were invested with a Bermuda-based insurer that has since collapsed, the Journal reported.
Lindberg has said some of the assets were already worthless before the investments were made.
Top photo: Lindberg (Associated Press)
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