- The state Court of Appeals has upheld state Insurance Commissioner Mike Causey's plan to liquidate two insurance companies owned by Greg Lindberg. Another Lindberg company tried to have the liquidation delayed.
- Lindberg is scheduled to return to federal court on May 6 for a retrial on bribery and fraud charges. A federal Appeals Court threw out an earlier conviction that led to a seven-year prison sentence.
- Appeals Court judges agreed that the trial court should not have allowed Lindberg's GBIG Holdings to intervene in the case.
The North Carolina Court of Appeals has issued a ruling preventing one of Greg Lindberg’s companies from delaying the liquidation of two other insurance companies he owns. Lindberg was once North Carolina’s top election campaign donor. He’s scheduled to face a retrial this spring on federal bribery and fraud charges.
A unanimous three-judge appellate panel issued an opinion Tuesday against GBIG Holdings. That company had sought to delay liquidation of Bankers Life Insurance Company and Colorado Bankers Life Insurance Company.
“Southland National Insurance Corporation (“Southland”), BLIC, and CBLIC are licensed domestic insurers, owned by GBIG. GBIG is wholly owned by Lindberg,” Judge Julee Flood explained in the court’s opinion.
State Insurance Commissioner Mike Causey filed paperwork in November 2022 to liquidate BLIC and CBLIC. “At the time of filing, BLIC’s assets of $253,163,012 did not exceed its liabilities of $345,062,743, and CBLIC’s assets of $1,369,052,180 did not exceed its liabilities of $2,508,953,520,” Flood explained.
“Two weeks later, GBIG filed an objection to the petition for liquidation as well as a motion for continuance to allow discovery, asserting that, as the ‘parent company’ of both BLIC and CBLIC, it should be allowed to present evidence showing neither company was insolvent,” Flood added.
A trial judge rejected GBIG’s motion and ordered the liquidation in December 2022.
Appellate judges agreed the trial judge should not have allowed GBIG to intervene in the case. Otherwise, the Appeals Court upheld the liquidation order.
“The Record is replete with evidence to support the trial court’s conclusion that both BLIC and CBLIC were insolvent and ‘in such condition as to render the continuance of its business hazardous, financially, or otherwise, to its policyholders,’” Flood wrote. “In ordering both BLIC and CBLIC into liquidation, the trial court focused on Article 30’s purpose — to protect the interests of thousands of policyholders in the State of North Carolina.”
Lindberg is dealing with multiple cases in state and federal court.
He is scheduled to head back to federal court on May 6 for a retrial on fraud and bribery charges that initially sent him to prison for a seven-year sentence. An Appeals Court later wiped out that sentence. Charges were connected to Lindberg’s interaction with Causey.
A December court order set other deadlines in connection with the retrial of Lindberg and co-defendant John Gray. Pretrial motions are due March 25. Briefs are due April 15. Exhibits, witness lists, proposed jury instructions, and a proposed verdict are due April 29.
US District Judge Max Cogburn agreed in October to delay the retrial. It had been scheduled for November.
It’s the second delay for the retrial. In both cases, the delay related to legal representation for Gray.
Gray’s legal team asked for the delay. Federal prosecutors agreed to extend the case for at least five months.
“[F]ailure to grant such a continuance would deny counsel for Defendant the reasonable time necessary for effective preparation, taking into account the exercise of due diligence,” Cogburn wrote in October, referring to Gray. “Moreover, the ends of justice served by granting such continuance outweigh the best interests of the public and Defendant in a speedy trial.”
The order referenced Lindberg without naming him. “[T]his matter is continued as to the remaining co-defendants and the time is excluded as a reasonable period of delay as such defendants are joined with a co-defendant whose case has been continued from the term and as to whom the time for trial has not run and no motion for severance has been granted.”
A motion filed Oct. 4 signaled the potential delay.
Gray has faced multiple changes in legal representation. His current legal team, two Asheville-based attorneys, officially joined the case on Sept. 26.
“Discovery for the initial trial was voluminous, including more than 80 hours of recorded conversations between the defendants and witnesses cooperating with the government,” according to the Oct. 4 motion. “In December, 2022, the government provided six million pages of supplemental discovery in a related case involving Mr. Lindberg. It is unclear how much of the additional discovery counsel for Defendant Gray will be required to review prior to trial.”
“Counsel, new to the case, will need time to review the discovery and discuss it with their client,” Gray’s attorneys wrote. “Requiring Defendant Gray to be tried before April, 2024 will unreasonably deny him continuity of counsel and deny replacement counsel the reasonable time necessary for effective preparation, taking into account the exercise of due diligence.”
Gray’s motion arrived on the same day that a lawyer for Lindberg appeared at the state Court of Appeals in a separate case. Lindberg is challenging a state Superior Court ruling related to a $600 million judgement against him. The Universal Life Insurance Company, or ULICO, argued to a three-judge appellate panel that Lindberg is trying to delay paying the debt.
In a court filing in another case, ULICO claimed that Lindberg owes at least $1.9 billion to his top creditors.
The retrial is tied to federal charges that Lindberg attempted to bribe Causey with “more than $2 million” after Causey’s 2016 election. Causey worked with federal law enforcement officials, including wearing a surveillance wire, 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 US Circuit Court of Appeals tossed out that conviction in June 2022. Appellate judges ruled that mistakes in Cogburn’s jury instructions had “infected” Lindberg’s convictions.
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 in the last decade 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.