Down But Not Out – Legal Battle Over North Carolina Allegations Continues

Greg Lindberg and his consultant are continuing to fight allegations that they promised to make improper campaign contributions to the re-election campaign for the North Carolina insurance commissioner.

Legal Battle Over North Carolina Allegations Continues

Greg Lindberg says he’ll be seeking a new trial and filing a request for an appeal.

By Allison Bell | March 10, 2020 at 01:02 PM

Greg Lindberg and his consultant are continuing to fight allegations that they promised to make improper campaign contributions to the re-election campaign for the North Carolina insurance commissioner.

A federal jury convicted Lindberg and the consultant, John Gray, of public corruption and bribery charges last week in Charlotte, North Carolina, after a three-week trial before U.S. District Judge Max Cogburn Jr.

The jury acquitted another defendant, John Palermo, who is an Eli Global vice president.

Resources

  • Links to documents related to the rehabilitation of Colorado Bankers Life and its sister companies are available here.
  • A set of the rehabilitators’ answers to questions frequently asked by producers is available here.
  • Greg Lindberg’s press releases and other documents related to the litigation, including a slidedeck summarizing the defendants’ closing arguments, are available here.
  • The U.S. Department of Justice press release about the jury verdict is available here.
  • Mike Causey’s statement about the jury verdict is available here.

A fourth defendant, Robert Hayes, pleaded guilty in 2018 to making false statements to the FBI, according to officials with the U.S. Department of Justice.

Lindberg and Gray will be seeking a new trial and filing appeals, according to a representative for Global Growth LLC, a Lindberg company.

Greg Lindberg

Greg Lindberg is the founder of Eli Global LLC, the parent of Global Bankers Insurance Group. The group controlled Bankers Life Insurance Co., Colorado Bankers Life Insurance Co. and Southland National Insurance Corp. A North Carolina state court put the companies in rehabilitation in June 2019.

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The companies are still in rehabilitation.

Lindberg now serves as the founder of Global Growth, a Durham, North Carolina-based health care technology company.

The Bankers Life company involved in the proceedings has no connection with the Bankers Life and Casualty Company that’s owned by CNO Financial Group Inc.

The Case

Federal prosecutors have alleged that Lindberg and Gray made contributions to the re-election campaign of Mike Causey, the North Carolina insurance commissioner, from April 2017 through August 2018, in an effort to influence decisions that could have helped Global Bankers Insurance Group.

Prosecutors say Lindberg and Gray wanted Causey to change the official who was in charge of overseeing Global Bankers.

Causey reported concerns about the political contributions, and about requests made by Lindberg and Gray, to the FBI in January 2018, and he agreed to cooperate with federal investigators, officials say.

Reactions

Causey put out a statement welcoming the jury verdict.

“When I took office, I swore an oath to support and maintain the laws of this state and to faithfully discharge the duties of my office as commissioner of insurance,” Causey said in the statement. “I also committed to rooting out insurance fraud and corruption wherever it may be, and to prosecute such fraud to the fullest extent of the law. It is with these guiding principles that I agreed to cooperate with the federal authorities in their investigation.

“Since I took office in January 2017, I have worked with our professional staff to ensure that all companies are treated fairly and consistently, and that the policyholders of our state are protected. The verdict handed down today by the jury emphasizes this point and shows that the office of the commissioner of insurance is not for sale. I appreciate all the work that the U.S. attorney’s office and the Federal Bureau of Investigation have put into this case.”

George Vandeman, chairman of Global Growth, responded to the verdict on behalf of Lindberg and the other defendants.

Vandeman said in his statement that Causey misrepresented the situation and had been retaliating against Lindberg because Lindberg was a political opponent.

“We respect the jury’s decision, but we absolutely believe that these verdicts are contrary to the evidence,” Vandeman said. “The jury only saw a portion of what this case was about. We intend to pursue all legal avenues in seeking a new trial on these issues and will immediately initiate an appeal of these verdicts.”

One of Causey’s accusations related to allegations about a $110,000 campaign donation. The defense team proved during the trial, and the FBI conceded, that the donation was never made, according to Vandeman.

Testimony showed that the FBI coached Causey to isolate Lindberg from his advisors during meetings and to induce the offer of a bribe, according to Vandeman.

Lindberg agreed only to offer to set up a legal independent expenditure committee that Causey would have no control over, and he and other defendants repeatedly stated that they would do only what was legal under North Carolina election law, Vandeman said.

The Rehabilitation

If upheld, the jury verdict against Lindberg would have no direct effect on the rehabilitation of Colorado Bankers Life and its two sister companies.

The companies are in a state of receivership, but they are not being liquidated, according to a set of answers to frequently asked questions posted on the Colorado Bankers Life website.

Causey is the companies’ rehabilitator.

Noble Consulting Services Inc. is acting as the special deputy rehabilitator.

Colorado Bankers Life and the two sister companies are paying ordinary medical claims, dental claims, life insurance benefits and annuity benefits in full, and the companies are paying interest at the guaranteed rates, officials say in the answers document.

Customers who want to surrender annuities or make penalty-free partial withdrawals must go through a hardship application process.

Agent appointments have been terminated, but agents still have administrative access to clients’ contract information.

— Read Creating Client Events That Aren’t a Waste of Time, on ThinkAdvisor.

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Allison Bell

Allison Bell, ThinkAdvisor’s insurance editor, previously was LifeHealthPro’s health insurance editor. She has a bachelor’s degree in economics from Washington University in St. Louis and a master’s degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at abell@alm.com or on Twitter at @Think_Allison.

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