- A new court filing at the N.C. Supreme Court suggests former top state political donor Greg Lindberg owes creditors $1.9 billion or more.
- Lindberg is asking the state's highest court to overturn a state Appeals Court ruling against him and associated companies. The legal dispute involves insurance companies once linked to Lindberg.
- The Universal Life Insurance Company, ULICO, filed its own document supporting reversal of the state Appeals Court ruling. ULICO argues that the state court decision could hurt its $600 million judgment against Lindberg.
A new filing at the N.C. Supreme Court suggests the state’s former top political donor owes $1.9 billion or more to his creditors. The filing arrives as the donor, Greg Lindberg, asks the state’s highest court to reverse a lower court ruling in a dispute involving insurance companies.
Lindberg is awaiting a retrial in November on federal fraud and bribery charges. A jury convicted him of attempting to bribe N.C. Insurance Commissioner Mike Causey after Causey’s 2016 election. The 4th U.S. Circuit Court of Appeals tossed out Lindberg’s seven-year prison sentence in 2022.
In addition to the retrial of that federal case, Lindberg is involved in state court disputes. His attorneys filed paperwork Tuesday in Southland National Insurance Company v. Lindberg. Lindberg and associated companies are asking the state Supreme Court to overturn a state Appeals Court ruling against them. The high court agreed on July 13 to block the Appeals Court decision from taking effect.
On the same day Lindberg’s latest petition arrived at the state Supreme Court, the Universal Life Insurance Company, or ULICO, filed a separate document in the Southland case. Universal Life also seeks a reversal of the state Appeals Court decision.
ULICO says it “stands as Lindberg’s largest judgment creditor.” The company’s court filing suggests that it holds a “money judgment that exceeds $600 million.” That judgment stems from Lindberg “draining” a trust fund designed to make annuity payments for policyholders in Puerto Rico. The document also references court rulings involving Lindberg in the Bermuda Supreme Court.
ULICO takes issue with the way the state Appeals Court treated its claims against Lindberg compared to the claims of the N.C. insurance companies, branded “NCICs,” in the Southland case.
In the course of making its arguments, Universal Life offered an assessment of Lindberg’s finances.
“Lindberg’s financial statement reflects that the high end of his personal net worth is $1.43 billion,” according to the ULICO filing. “Based on the NCICs’ estimate, ULICO’s judgment, and Lindberg’s indebtedness to his Bermuda insurance companies, Lindberg appears to owe at least $1.9 billion to these creditors alone.”
Southland and other plaintiffs will have a chance to respond before the N.C. Supreme Court decides whether to grant Lindberg’s petition.
In its May ruling in the Southland case, a unanimous N.C. Appeals Court panel affirmed a May 2022 Wake County Superior Court ruling against Lindberg and multiple associated companies.
The trial judge found Lindberg and the other defendants “liable for breach of contract and fraud” in connection with insolvent insurance companies purchased in 2014. Those companies are plaintiffs in Southland.
Appellate judges overruled the trial judge’s decision not to award damages in the case. Until the state Supreme Court stepped in earlier this month, the lawsuit was scheduled to head back to a trial court to address the issue of a proper remedy for the plaintiffs.
Appeals Court Judge Julee Flood outlined key details of the case in her June 20 opinion.
“In 2014, Lindberg re-domesticated Plaintiffs to North Carolina in order to take advantage of this State’s favorable regulations,” Flood wrote. “Prior to this re-domestication, acting as owner of Plaintiffs, Lindberg made a special agreement with former Commissioner of Insurance, Wayne Goodwin, allowing Lindberg to invest up to forty percent of Plaintiffs’ assets into affiliated business entities. Lindberg then invested up to forty percent of Plaintiffs’ money into the purchase of other, non-insurance companies, also owned by Lindberg. Simply put, Lindberg created a scheme in which he caused $1.2 billon held for Plaintiffs’ policyholders to be invested into other non-insurance companies that he also owned or controlled.”
“In November 2016, Wayne Goodwin lost his seat as Commissioner of Insurance to Mike Causey (the “Commissioner”), who reduced the cap on affiliated investments from forty percent to ten percent,” Flood wrote. “Lindberg struggled to untangle his affiliated investments and, as the deadline for diversification drew near, the North Carolina Department of Insurance (the “NCDOI”) grew concerned that there would be a ‘mismatch between investments and policyholder liabilities.’”
“In other words, because Lindberg had invested so much of Plaintiffs’ money into affiliated companies, the NCDOI worried that Plaintiffs might experience a shortfall on their obligation to pay individual policyholders,” Flood added.
A 2018 consent order placed the plaintiff businesses under administrative supervision. A 2019 memorandum of understanding linked to restructuring of the businesses prompted the legal dispute addresses in the Southland case.
Causey is also a key player in the federal case against Lindberg scheduled to start Nov. 6.
Federal authorities argue that Lindberg attempted to bribe Causey with “more than $2 million” after Causey’s 2016 election. Causey worked with federal law enforcement officials to collect evidence against Lindberg and associates.
Lindberg was convicted in March 2020 and was sentenced to a seven-year federal prison term. But the 4th U.S. Circuit Court of Appeals tossed out that conviction in June 2022. Appellate judges ruled that mistakes in Judge Max Cogburn’s jury instructions had “infected” Lindberg’s convictions.
A second federal trial related to a 13-count indictment against Lindberg has been delayed. Originally scheduled this summer, that case will now be pushed back until after the bribery and fraud retrial.
In November Cogburn rejected Lindberg’s attempt to end GPS monitoring while he awaits his new trial.
“The concerns previously expressed by the Government continue to exist,” Cogburn wrote in a Nov. 10 order. “Mr. Lindberg now lives in Tampa, Florida, where, according to the Government, he has ready access to both his ocean-going yacht and airplane.”
“The Government has also indicated that Lindberg continues to have significant overseas business interest and assets available to him outside of the United States,” Cogburn added. “As for Defendant’s contention that he has no incentive to flee because he has a growing family with an additional child on the way, the Court is not persuaded.”
“Here, Lindberg’s knowledge of an ongoing criminal investigation into his business practices and the potential for additional criminal charges, as well as the knowledge that he was previously convicted by a jury which resulted in his going to federal prison to serve an 87-month sentence, and the recent civil action filed against him by the SEC provide an incentive for him to flee,” the judge concluded. “The Court finds that location monitoring is a reasonable restriction in light of Lindberg’s motivation and ability to flee.”
A court filing from Lindberg disputed the government’s argument that he’s a flight risk.
“Mr. Lindberg lives in a permanent home in Tampa with his significant other and five of his children — all under the age of three, and two under the age of one,” according to the brief. “He regularly sees his other children in Tampa when they visit him on a monthly basis. He is also expecting another child in March of 2023.”
In addition to the fraud and bribery charges, Lindberg learned in August 2022 about a separate federal complaint from the U.S. Securities and Exchange Commission. The SEC accused Lindberg of raiding his own insurance companies in a “massive fraudulent scheme.”