Feds reject proposal to split Lindberg, Gray retrials on bribery, fraud charges

US Attorney Dena King of North Carolina's Western District (Image from justice.gov)

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  • Federal prosecutors object to a proposal to split the bribery and fraud retrials of Greg Lindberg and John Gray. Both are scheduled to return to federal court on May 6.
  • Lindberg and Gray both faced convictions in 2020 on charges related to the bribery of North Carolina Insurance Commissioner Mike Causey after the 2016 election. Causey helped federal investigators make the case.
  • A federal Appeals Court threw out both convictions in 2022. Gray argued in a March court filing that a joint retrial would hurt him. Lindberg is likely to blame Gray for alleged illegal actions in the case, Gray's lawyers argued.

Federal prosecutors oppose a plan to split the bribery and fraud retrials of Greg Lindberg and John Gray. Both are scheduled to return to federal court on May 6. The government submitted its latest court filing Friday.

The case involves the federal government’s charges that Lindberg bribed state Insurance Commissioner Mike Causey after Causey’s 2016 election. Causey worked with federal investigators, including wearing a surveillance wire during interactions with the defendants.

Lindberg was once North Carolina’s top election campaign donor.

Both Lindberg and Gray were convicted during their initial trial in 2020. The 4th US Circuit Court of Appeals threw out those convictions in June 2022 because of problems related to jury instructions.

Gray filed paperwork in March seeking to sever his case from Lindberg’s.

“This Court should deny the defendant’s eleventh-hour motion for severance because he has failed to justify the extraordinary burden he seeks to place on this Court, jurors, witnesses, the government, and others by asking the Court to hold two separate trials of unambiguously interconnected charges and defendants,” wrote lawyers representing US Attorney Dena King and Corey Amundson, chief of the Public Integrity Section in the US Justice Department’s Criminal Division.

“It cannot be disputed that the defendants were properly joined in this case,” the federal government’s court filing continued. “After all, ‘they are alleged to have participated in the same … series of acts or transactions[] constituting an offense or offenses,’ namely their respective roles in bribing a public official to take action to benefit Defendant Lindberg’s companies.”

“The allegations contained in the Indictment are more than sufficient to meet the longstanding ‘preference in the federal system for joint trials of defendants who are indicted together.’ Indeed, Defendant Gray concedes that he was properly joined with co-defendant Greg Lindberg for the joint re-trial of their case in which they are charged with conspiring together and with others to commit honest services wire fraud and with aiding and abetting each other to commit federal funds bribery,” federal lawyers argued.

“Gray also concedes that the law particularly favors joint trials of defendants alleged to have conspired with one another. While he claims that there is a possibility of ‘antagonistic’ defenses, Gray fails to demonstrate the exceptional circumstances required to justify severance, which demand a showing of ‘a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.’”

Federal lawyers noted that Gray submitted his request “merely a few weeks” before the retrial was scheduled. “Gray’s request should be denied. The purported prejudice that he claims might result from a joint re-trial is entirely speculative. And even if the evidence about which he speculates is in fact offered, he has failed to show it would rise to the level of ‘irreconcilable and mutually exclusive’ defenses.”

“[W]hen balanced against the extraordinary burden a severance would place on this Court, jurors, the witnesses (which would be nearly identical in each trial), and the government, plus the fact that this case was originally tried over four years ago, severance would considerably degrade the efficient administration of justice,” according to the federal lawyers’ court filing.

Gray’s motion in March described the planned joint retrial as a “prejudicial joinder.”

Lindberg, Gray, and two other defendants all were joined for the original trial in February and March 2020. One defendant, former state Republican Party Chairman Robin Hayes, entered a guilty plea before the trial. A jury acquitted defendant John Palermo.

The jury convicted Lindberg and Gray. Lindberg faced a seven-year prison sentence. Gray was sentenced to 30 months in prison. The 4th US Circuit Court of Appeals later threw out both convictions in June 2022 because of problems related to jury instructions.

Gray was a political consultant “hired by Lindberg to interact with the Department of Insurance,” according to his court filings.

“At the first trial, the defenses of Lindberg and Gray were compatible if not identical: we did nothing wrong but, if we did, we were entrapped to do so,” Gray’s lawyers wrote.

Yet events since the initial conviction in March 2020 suggest the two men might approach a retrial with a different defense, Gray’s lawyers argued.

Gray’s court filing pointed to an online newspaper advertisement from Lindberg six months after the conviction. The ad described Lindberg as a “political neophyte” who relied on bad advice from more experienced advisers, including Gray.

The court document also cited Lindberg’s self-published book about the 633 days he spent in prison before the 4th Circuit’s ruling. ” In the book, he again blames John Gray, among others, for misleading him about the criminality of his conduct,” Gray’s lawyers wrote.

“If Mr. Lindberg’s published thoughts are any indication, he now asserts a different defense – that, yes, he was involved in criminal conduct but that his involvement was blameless and he was misled into crime by Gray and others,” Gray’s lawyers wrote.

“Lindberg’s assertions that ‘Gray-made-me-do-it’ are consonant with arguments made by government counsel at Gray’s sentencing,” the document continued. “At the upcoming re-trial, the government’s position would be enhanced considerably and Mr. Gray’s defense unfairly prejudiced by Lindberg’s newfound defense.”

“Defense counsel understands that ‘advice of political consultant’ is not a legal defense,” Gray’s lawyers wrote. “Lindberg now contends, however, that Gray was one of a group of professionals – including attorneys – who misled him regarding his dealings with Commissioner Causey. Evidence of the contemporaneous advice given him by lawyers will be inextricable from evidence of the advice Lindberg claims was provided by Gray.”

“Here, Gray would be relatively powerless to combat a problem that he had no hand in making,” according to the court filing.

“In order to acquit Gray, the jury must now, in addition to rejecting the government’s arguments, discount Lindberg’s contention that Gray and others beguiled him into committing certain crimes,” Gray’s lawyers wrote. “Lindberg, in testifying or offering other evidence in support of this theory, would become a ‘second prosecutor’ of Gray.”

US District Judge Max Cogburn agreed in October 2023 to delay the retrial. It had been scheduled for November.

The joint retrial has been delayed twice. In both cases, the delay related to legal representation for Gray.

The retrial is tied to federal charges that Lindberg attempted to bribe Causey with “more than $2 million” after Causey’s 2016 election.

A second federal trial related to a separate 13-count indictment against Lindberg already has been delayed. Originally scheduled last summer, that case will now be pushed back until after the bribery and fraud retrial.

Before the legal action against him, Lindberg had attracted attention as a top donor to political campaigns in North Carolina. He supported Democratic Insurance Commissioner Wayne Goodwin’s unsuccessful 2016 re-election bid. Goodwin lost to Causey.

Later Lindberg became the largest financial contributor in 2017 to the NC Republican Party and two groups supporting then-Lt. Gov. Dan Forest, a Republican. Forest lost the 2020 governor’s race to the incumbent Democrat, Gov. Roy Cooper.