Top executive of Greg Lindberg's insurance companies pleads guilty to conspiracy to defraud US
A top executive who worked for North Carolina billionaire Greg Lindberg pleaded guilty to one count of conspiracy to defraud the United States.
The court documents released Thursday detail executive Christopher Herwig, Lindberg and a third employee’s efforts to create a financial scheme to move money between several insurance companies and other businesses Lindberg owned.
The court documents released by prosecutors in the Western District of North Carolina do not specifically identify Lindberg by name, but instead refer to him as the “owner” of the companies where Herwig worked.
Lindberg owned Southland National Insurance Corp., Bankers Life Insurance Co., Colorado Bankers Life Insurance Co. and Southland National Reinsurance Corp. until December 2022, when he agreed to sell to avoid forced liquidation. North Carolina regulators would have to sign off for the deal to go forward.
In August, the U.S. Securities and Exchange Commission (SEC) charged Lindberg, Herwig and their Malta-based registered investment adviser, Standard Advisory Services Limited, for defrauding clients out of more than $75 million through undisclosed transactions that benefited themselves and their companies. According to the SEC’s complaint, from July 2017 through 2018, Lindberg and Herwig, through Standard Advisory, breached their fiduciary duties to their advisory clients by fraudulently causing them to engage in undisclosed related-party transactions that were not in the best interest of their clients. Lindberg still faces the SEC complaint accusing him of a “massive fraudulent scheme.”
Herwig worked for the conglomerate from August 2010 to August 2020, according to the court documents. Also, the documents claim Herwig worked as a director/trustee and chief investment officer/treasurer of the companies.
The court documents claim the scheme happened from January 2016 through at least 2019. They claim the scheme tried to “skim” money from the various businesses to Lindberg’s benefit while concealing it from regulators at the North Carolina Department of Insurance.
The documents claim Lindberg, Herwig and and a third employee “extracted hundreds of millions of dollars from various insurance companies through a series of loans and related financial transactions to fund the acquisition and operation of other [Lindberg] companies.” It included skimming about $55 million from his companies through the scheme and used the money from his insurance companies to purchase a mansion for Lindberg on Morning Mountain Road in Raleigh and a “tennis facility properties” in Chapel Hill.
Lindberg is awaiting a second trial on charges of trying to bribe the state’s insurance commissioner, Mike Causey, who recorded their conversations and cooperated with the FBI in a case involving political donations.
Lindberg went to prison on bribery charges in 2020 after a federal trial. He was released earlier this year after the U.S. Court of Appeals for the Fourth Circuit found a problem with the judge’s instructions in that trial. He is set to be retried in March 2023.
