After two years of litigation, maneuvering and negotiating, insurance companies once owned by convicted North Carolina businessmen Greg Lindberg may soon see some recovery of the millions in assets that Lindberg allegedly siphoned away.
A federal judge this week approved a special master’s plan to distribute $318 million from the sale of a group of Lindberg-owned health care software companies, bringing partial closure to what has been called one of the most complex financial crimes prosecutions, involving a web of affiliated companies on two continents and regulatory and legal actions in several U.S. states.
The proceeds of the sale will be disbursed this way, according to the July 22 order from U.S. District Judge Max Cogburn, of the Western District of North Carolina:
- $108 million to the Bermuda insurance companies, a group of four life insurance companies, some of which are now in bankruptcy proceedings.
- $172 to North Carolina insurance companies, comprising several life insurance firms.
- $25 million to Vista Life & Casualty Reinsurance Co.
- $14 million to the special master, Charlotte attorney Joseph Grier, who was appointed by the court in January to manage the sale and distribution of the assets. The funds will be held in reserve to cover administrative expenses, including some incurred by Lindberg’s criminal defense lawyers.
The buyer of the software companies was not disclosed in the court documents.
The $318 million is just part of the $1.1 billion or more that Lindberg, who was at one time a billionaire and heavy political donor, was accused of diverting from his insurance and reinsurance companies and their policyholders. Lindberg allegedly used the insurance assets to fund other companies, investments, and a lavish lifestyle, according to court documents and news reports.
In 2020, Lindberg was convicted of attempting to bribe North Carolina Insurance Commissioner Mike Causey in exchange for more lenient regulatory actions that would have allowed Lindberg’s insurance firms to keep less surplus on hand. An appeals court threw out that conviction due to improper jury instructions, but Lindberg was convicted a second time in 2024. He has yet to be sentenced while the special master works through the network of companies and transactions that Lindberg oversaw through the years.
Last fall, Lindberg pleaded guilty to separate but related charges in federal court, including making false statements to regulators, lying about the financial condition of his insurance companies and money laundering, court records show. As part of his plea agreement, Lindberg agreed to pay restitution to victims, many of whom had paid premiums on policies offered by his life insurance carriers. The U.S. Securities and Exchange Commission also sued Lindberg, charging that he misappropriated some $57 million in client funds. That case was settled in March of this year.
The multiple criminal and civil cases reflect the complexity of Lindberg’s transactions.
“As can be gleamed from the Bill of Indictment, Defendant amassed ownership in a complicated web of hundreds of companies across various industries financed through an even more complicated web of lending arrangements with Defendant’s insurance company affiliates that the Special Master is investigating,” reads the special master’s status report, filed with the court in early July.
Lindberg appealed one $524 million civil judgment against him and has engaged in other litigation related to the alleged misdeeds. Grier noted in his proposal to sell the software companies that Lindberg has complicated matters with his court filings in Texas and Colorado, filings known as the Wilson Suits.
“For the avoidance of doubt, the Special Master (a) never requested that the Wilson Suits be filed, (b) considers the Wilson Suits a nuisance at this time; and (c) intends to facilitate the dismissal of the Wilson Suits, in toto, in due course,” Grier wrote.
Photo: Lindberg in 2023 (provided by Lindberg news release)
Related: NC High Court Allows Liquidation of Lindberg Insurers; He Owes $524M in Fed Case
Topics Legislation
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