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North Carolina Supreme Court Lets Stand Greg Lindberg’s Civil Fraud Liability

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North Carolina Supreme Court Lets Stand Greg Lindberg’s Civil Fraud Liability


The North Carolina Supreme Court has decided that it will not, after all, review another legal filing by convicted insurance entrepreneur Greg Lindberg.

The Oct. 17 ruling lets stand a 2023 decision by the state Court of Appeals, which found that Lindberg and some of his affiliated companies were liable for fraud by misleading life insurance companies and a reinsurance firm that he once owned.

“We hold the trial court’s conclusions of law were supported by findings of fact based on competent evidence,” the appeals court judges wrote in the 2023 opinon.

The high court in December 2023 had agreed to review the appeal court’s order, at Lindberg’s behest. But after hearing oral arguments, the Supreme Court justices changed their minds, noting that “discretionary review was improvidently allowed by order on 13 December 2023.”

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No further explanation was offered. But with multiple criminal and civil proceedings stemming from the bribery conviction of and the regulatory crackdown on Lindberg, the appeal court’s 24-page opinion offers a valuable recount of some of the main aspects of the voluminous litigation involving Lindberg since 2016.

“Simply put, Lindberg created a scheme in which he caused $1.2 billon held for Plaintiffs’ policyholders to be invested into other non-insurance companies that he also owned or controlled,” the appellate judges wrote in the opinion in Southland National Insurance Corp., et al, vs. Greg Lindberg, et al.

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It all began in 2014 under previous North Carolina Insurance Commissioner Wayne Goodwin, the court explained. Lindberg sought to re-domesticate Southland, Bankers Life Insurance Co., Colorado Bankers Life Insurance Co., and Southland National Reinsurance Corp. to North Carolina. Lindberg struck a special agreement with Goodwin, allowing Lindberg to break what has often been considered a cardinal rule for insurance companies – keeping adequate reserves on hand and under the control of the insurance carrier.

Instead, Lindberg was allowed to invest up to 40% of the insurance companies’ assets into affiliated business entities, and Lindberg soon invested hundreds of millions into non-insurance firms he owned or controlled.

In 2016, Mike Causey defeated Goodwin in the election and took over as insurance commissioner. Causey moved swiftly to reduce the cap on affiliated investments – back to 10%, the court explained.

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Lindberg in early 2018 attempted to bribe Causey with heavy campaign contributions, hoping for a relaxation of the rules as he struggled to “untangle his affiliated investments,” the appellate judges noted. Causey cooperated with federal authorities and wore a recording device during the meeting with Lindberg. Lindberg was convicted of bribery in 2020, had his conviction overturned due to improper jury instructions, then was convicted again in 2024. He’s still awaiting sentencing.

Meanwhile, in late 2018, while Lindberg’s prosecution was pending, it became obvious that Lindberg’s affiliated companies would not meet their obligations to restore funds to cover the life insurers’ policyholder liabilities. NCDOI placed Southland and the other insurance companies under administrative supervision. An out-of-state consultant was put in charge, and deadlines were set for repayment of the assets.

With it becoming clear that Lindberg’s affiliated firms would not meet the deadlines, Southland and the other insurance companies signed a memorandum of understanding and other agreements, restucturing the financial obligations, providing a $40 million line of credit to a company owned by Lindberg, and making the affiliated firms subsidiaries of a newly created holding company, the court explained.

In 2019, Lindberg’s affiliated firms failed to meet the restructuring agreements’ goals and failed to make the affiliated businesses part of the holding company. Southland filed suit, charging fraud.

The trial court in Wake County largely agreed, and the appeals court upheld the lower court’s ruling.

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“Defendants attempt to convince this Court that the MOU’s main purpose was not only to rehabilitate Plaintiffs’ companies, but to ensure Lindberg would continue to benefit from the overall transaction,” the appellate judges wrote. “This argument ignores another of Defendants’ motivations: to make money using capital provided by hardworking, North Carolina policyholders.”

Lindberg’s team claimed that the memorandum of understanding was unenforceable. The appeals court didn’t buy that argument.

“Defendants and Lindberg have enjoyed the benefit of millions of dollars of debt relief provided by Plaintiffs, yet continue to claim the MOU is unenforceable,” the court wrote.

On other arguments the court was equally critical of Lindberg’s assertions.

“Put plainly, Defendants made representations about their ability to perform under the MOU, then just two weeks before performance was due, cited those exact representations as the reason why they could not perform,” Judge April Wood wrote in the opinion.

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And because Lindberg understood the intricacies of the affiliated businesses’ structures, he knew that performance under the MOU was impossible, “yet made representations that induced Plaintiffs to enter into the contract. For those reasons, we hold the trial court did not err in finding Defendants’ actions satisfied the elements of fraud.”

The appeals court remanded part of the case to the lower court to determine remedies available to Southland and the other plaintiff insurance companies.

In November 2024, Lindberg pleaded guilty to $2 billion in fraud in a related prosecution. In July of this year, a federal judge approved a plan to distribute $318 million from the sale of a Lindberg-owned software firm to the life insurance policyholders. In early October, the judge allowed the release of policyholder information so that a special master in the case could finally begin distributing funds to the victims of the fraud.

Read more about Lindberg’s bribery conviction here, and other court rulings here.

Topics
Fraud
North Carolina
Liability

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North Carolina

Greenville Police Department Join Effort Promoting Safe Firearm Storage

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Greenville Police Department Join Effort Promoting Safe Firearm Storage


The Greenville Police Department joined community leaders in Pitt County this week to promote safe firearm storage as part of North Carolina’s annual NC S.A.F.E. Week of Action, the Greenville Police Department said.

In a statement, the Greenville Police Department thanked NC S.A.F.E. and the North Carolina Department of Public Safety for the opportunity to help educate residents about responsible firearm storage practices.

We want to thank NC S.A.F.E. and the North Carolina Department of Public Safety for allowing us to help relay to the community the importance of safely securing firearms so that we can avoid tragedies in the future!

The local event follows Gov. Josh Stein’s proclamation recognizing June 1-7 as NC S.A.F.E. Week of Action.

According to Gov. Stein’s office, the campaign aims to encourage gun owners to securely store firearms and make safety resources more widely available across North Carolina.

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An unlocked gun is a tragedy waiting to happen, and too often, it does,” said Governor Josh Stein. “NC S.A.F.E Week is a reminder to all of us about the measures we can all take to keep ourselves and the people we love safe.

Safe firearm storage is one of the simplest steps we can take to prevent tragedies before they happen,” said North Carolina Department of Public Safety Deputy Secretary William Lassiter Lassiter. “NC S.A.F.E. is increasing awareness around secure firearm storage and making safety resources more accessible to help reduce preventable injuries and build safer communities throughout our state.



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The Real Reason North Carolina’s GOP Is Proposing the Most Radical Anti-Abortion Bill Yet

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The Real Reason North Carolina’s GOP Is Proposing the Most Radical Anti-Abortion Bill Yet


Another anti-abortion abolitionist proposal has been in the news. This time, conservative lawmakers in North Carolina have asked voters to approve a state constitutional amendment recognizing the personhood of embryos and establishing that anyone who ends an embryonic life is guilty of first-degree murder. Those penalties might also apply to people pursuing in vitro fertilization or using some contraceptives, given that abortion foes sometimes view either as requiring the taking of unborn life. And that’s the most ordinary part of the proposal: The bill also provides that private individuals have a right to use deadly force to prevent “the willful destruction of life.” House Bill 1232 isn’t clear about exactly who could exercise this constitutional right to vigilante violence. Would it just be available to those seeking to kill abortion providers and patients? Or might it apply even more broadly to those seen to aid them?

The bill has been greeted with bafflement and disbelief. One of its co-sponsors was embarrassed enough to remove his name from the proposal. But the idea of licensing private violence did not come out of thin air. There have been decades of debate about the use of force within the anti-abortion movement. And as conservatives embrace an increasingly punitive agenda, old justifications for violence have reemerged.

Since the 1960s, abortion foes have rallied around the idea that constitutional rights begin the moment an egg is fertilized. That meant that liberal abortion laws would violate the federal Constitution. Because that claim didn’t gain traction in the federal courts, abortion opponents didn’t have to settle what it would mean in practice to enforce this idea of personhood. Did it require that abortion be punished as murder, or that women be punished? Might it instead require more support for women during pregnancy?

By the 1980s, as the anti-abortion movement aligned with the Republican Party, the movement’s leaders increasingly retooled their ideas of justice for the unborn to fit the GOP’s tough-on-crime agenda. They endorsed fetal homicide laws and backed prosecutions based on conduct during pregnancy. But these moves didn’t lead to the reversal of Roe, much less a decline in the abortion rate.

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Frustration led to a wave of lawbreaking. Operation Rescue, a clinic blockade group, invited supporters to use civil disobedience and break the law if necessary to stop people from entering abortion clinics. Operation Rescue disrupted the Democratic National Convention in 1992 and recorded thousands of arrests. Blockaders even developed a legal argument to justify their actions, drawing on the common law defense of necessity, which allows someone to break a law to achieve a greater moral good.

Some advocates went further. If abortion really were the murder of an equal person, they asked, why wasn’t it justified to use deadly force to protect that equal person?

Prominent figures in the late 1980s and early 1990s elaborated on that argument in books and talk-show appearances. The claim justified kidnappings, firebombings, and a series of murders of doctors, clinic staff, and security. Powerful anti-abortion groups denounced the violence, but the question of deadly force struck others as surprisingly complex. If a fertilized egg was an equal person, and if the way to protect that person involved violence, why was deadly force off limits?

While violence against abortion clinics and providers never went away, it receded from the peak of the 1980s and early 1990s. The federal Freedom of Access to Clinic Entrances Act, which heightened penalties for threats, violence, and obstruction of people entering facilities, radically undercut the clinic blockade movement when Congress passed it in 1994. So did the conviction of high-profile murder defendants like Michael Griffin and Paul Hill. The clinic blockade movement was consumed by internal divides, with multiple organizations even claiming the name Operation Rescue. Anti-abortion leaders mostly focused on change through the courts and politics.

Now that Roe is gone, the movement is at an inflection point. Personhood has become the movement’s new North Star. And while success in the federal courts isn’t imminent, there is now no reason a state couldn’t enforce any vision of personhood. That means that conservatives have to decide what they mean by enforcing the rights of the unborn. This bill is a sign that even punishing women doesn’t strike some as harsh enough.

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This bill won’t pass. For starters, North Carolina is not the most likely state to pass any abortion abolitionist bill; at the moment, it doesn’t even ban abortion from the moment of fertilization. And no state has yet passed any kind of abolitionist proposal, much less one allowing people to gun one another down in the name of protecting life.

But this bill has a different resonance now that Donald Trump has pledged not to enforce the FACE Act in the abortion context except in the most extreme circumstances. It is also a reminder of how the Overton window on personhood is shifting. Abolitionists who call for the punishment of women are gaining influence in state legislatures and movement debates. They have developed their own incremental approach: In South Carolina, for example, Richard Cash, a powerful lawmaker, tried this session to advance a bill punishing women for abortion, but only for a misdemeanor, rather than a felony. The bill became the second abolitionist proposal to pass through a committee this spring before time ran out to pass it this session.

Leading anti-abortion groups still speak out against abolitionists, but their strategy is clear: normalizing the idea of punishing women. The more extreme proposals conservatives advance, the more previously unthinkable ideas become politically realistic.



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In North Carolina Senate race, Democrat leans on economic message early

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In North Carolina Senate race, Democrat leans on economic message early


With one exception, Democrats have lost every single U.S. Senate race in North Carolina this century, their quests in recent years rocked by controversy and difficult political climates. This year, they are betting two things will make it different: The candidate is Roy Cooper, the southern state’s former governor, and the economy, where voter anger could imperil the party in power.

Months out from Election Day, Cooper’s Senate campaign is centering his message on economic anxiety. In his first television ad of the cycle — details of which were first reported by MS NOW — Cooper weaves his personal story with the kitchen-table concerns preoccupying voters.

“I’m running for the Senate to make life easier today,” Cooper says in the spot, which his campaign says is part of a seven-figure ad buy. “To go after insurance companies ripping you off. To make sure you can retire with dignity. And to build an economy that finally values working people.” 

The North Carolina race is primed to be one of the most important contests of this fall’s midterms as he attempts to flip control of one of North Carolina’s U.S. Senate seats for the first time since 2008. The recruitment of Cooper — a two-term governor who was elected both times while Trump carried the state in the same election cycle — has buoyed the party’s hopes. 

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This is also a contest in which Trump’s influence is clearly a factor. The president has thrown his support behind former Republican National Committee Chair Michael Whatley, pitting a candidate with deep ties to Trump against Cooper, who has long demonstrated an ability to win in the state despite national political headwinds.



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