North Carolina Business Magnate Indicted in $2bn Fraud Case

A business magnate and major political donor has been indicted for masterminding a “massive” $2bn scheme to defraud regulators and thousands of insurance policyholders.

Greg Lindberg, 53, of Durham, North Carolina, allegedly conspired with others between 2016 and 2019 to invest nearly $2bn in multiple insurance companies – many of which have since 2019 apparently been placed into rehabilitation or liquidation.

“The indictment reveals a carefully orchestrated scheme that relied on a web of complex financial investments and transactions designed to evade regulators, disguise the financial health of Lindberg’s insurance companies and conceal the alleged purpose of the scheme: Lindberg’s personal gain,” said US attorney Dena King.

“My office will continue to work with our law enforcement partners to investigate and prosecute financial wrongdoing and hold perpetrators accountable for their actions.”

Prosecutors accused Lindberg of evading regulatory requirements designed to protect policyholders, hiding the true financial health of his companies and using company funds for personal benefit. He is said to have purchased and refinanced properties with those funds, and forgave over $125m in personal loans from several of the companies.

In December 2022, one of Lindberg’s executives, Christopher Herwig, pleaded guilty to conspiring with Lindberg and others to commit wire fraud, investment advisor fraud and money laundering, and to making false statements in the business of insurance.

Lindberg is charged with one count of conspiracy to commit crimes in connection with insurance business, wire fraud and investment advisor fraud. He also faces one count of wire fraud, four counts of false insurance business statements presented to regulators, six counts of false entries about the financial condition or solvency of an insurance business and one count of money laundering conspiracy.

Each of the main counts carries a maximum penalty of 20 years in prison.

The North Carolina businessman, who was reportedly once the state’s largest political donor, is also facing retrial for a case in which he’s charged with attempting to bribe the commissioner of the North Carolina Department of Insurance.

His spokeswoman, Susan Estrich, told reporters last Friday that the government’s latest indictment was a tactic designed to help it secure victory in that retrial case.

“The latest charges stem from the government’s spending over five years going through over seven million documents on literally thousands of complicated financial transactions involving over 900 companies and handpicking alleged technical violations which have not caused any loss to policyholders in North Carolina or any other state for that matter,” she said.

What’s Hot on Infosecurity Magazine?