Former insurance executive and businessman Greg Lindberg was found liable for fraud in 2022 in connection with his insolvent insurance companies, but a North Carolina county court did not award damages.
Lindberg appealed. But so did four of his former insurance companies.
This week, the North Carolina Court of Appeals upheld the fraud verdict but ordered a new trial to determine the compensatory and punitive damages Lindberg may owe his companies, damages that can run into millions of dollars.
It is the latest legal blow for the man who was once considered a billionaire and international businessman who created life insurance and reinsurance operations. He faces a retrial in November on charges he tried to bribe the North Carolina Insurance Commissioner. His previous conviction on those charges was overturned last year. Lindberg, who now lives in Tampa, also faces another, federal criminal trial in 2024 on charges of fraudulent business practices, related to allegedly taking funds from his insurance companies. He was also charged by the US Securities and Exchange Commission with fraud.
The opinion of the North Carolina appeals court on June 20 in Southland National Insurance Corp. et al, v. Lindberg, written by Judge Julee Flood, explains the sequence of events. In 2014, Lindberg re-domesticated four insurance companies in North Carolina to take advantage of favorable regulations. These companies include Southland National, Bankers Life Insurance Co., Colorado Bankers Life Insurance, and Southland National Reinsurance.
Before the move, Lindberg made a special agreement with the former state insurance commissioner, Wayne Goodwin, which allowed Lindberg to invest up to 40% of the insurance companies’ assets in affiliated businesses, the verdict says.
“Simply put, Lindberg created a scheme in which he caused $1.2 billion held for plaintiffs’ policyholders to be invested in other non-insurance companies that he also owned or controlled, ” the judge wrote in the opinion.
In 2016, Causey defeated Goodwin for insurance commissioner and quickly moved to reduce the 40% allowance to 10%, worried that insurers did not have enough reserves to pay claims. Lindberg struggled to get rid of his co-investments, the court said. In 2018, state regulators placed Lindberg’s insurance companies under administrative supervision and created a memorandum of understanding requiring payment of funds and asking Lindberg to relinquish control of some of his subsidiaries.
Both the lower court and the appeals court found that Lindberg and three of his investment company associates violated the MOU and engaged in fraud.
“Here, there is no dispute that the plaintiffs were defrauded by the defendants, and they suffered economic damages as a result,” the appeals court opinion read.
The opinion can be found here.
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Fraud North Carolina
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