Northstar Financial boss pleads guilty to money laundering

A Florida man has pleaded guilty to conspiracy to commit offences against the United States and conspiracy to commit money laundering in connection with a scheme to defraud insurance regulators and policyholders through a web of companies based in Bermuda, North Carolina, Malta and elsewhere.

The US Justice Department said in a statement that Greg Lindberg, 54, of Tampa, conspired with others between 2016 and 2019 to defraud various insurance companies, other third parties, and ultimately thousands of insurance policyholders.

"Lindberg and others conspired to deceive the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his companies, and improperly used insurance company funds for his personal benefit," the Justice Department said. "Lindberg and his co-conspirators caused companies he controlled to invest more than $2 billion in loans and other securities with his own affiliated companies and laundered the proceeds of the scheme. As set forth in the indictment, Lindberg directed the scheme and personally benefitted from the fraud in part by 'forgiving' more than $125 million in loans to himself from the insurance companies that he controlled."

The Justice Department statement said that to carry out the conspiracies, Lindberg and others engaged in circular transactions among Lindberg’s web of entities using insurance company funds and made and caused to be made various materially false and misleading statements and representations to and omitted material information from regulators, various ratings agencies, insurance companies, insurance policyholders, and others regarding these transactions.

As a result of Lindberg’s conduct, his insurance companies, third-party entities, and policyholders suffered substantial financial hardship, and some of his insurance companies have been placed in rehabilitation and liquidation.

Lindberg bought Bermuda-based Northstar Financial Services in 2018. A year later, Lindberg was accused of wire fraud in the US.

The Bermuda Royal Gazette reported in May that Northstar, which became a segregated accounts company, is now in liquidation proceedings after filing for bankruptcy in the Supreme Court.

Initially founded in the 1990s, Northstar offered fixed and variable-rate annuity and investment products. But when investors wanted their money and the company was unable to pay, it was estimated to have had a deficit of more than $260 million, The Royal Gazette said.

By September 2020 it was reporting only $8 million in assets and filed for bankruptcy protection.

The Bermuda Monetary Authority filed a winding-up petition in the Bermuda Supreme Court against Northstar, a related company Omnia Ltd, together with a third company, PB Life and Annuity Co Ltd.

A joint provisional liquidators’ report counted more than 1,000 fixed-account holders with potential claims that had a value of $305,576,351 and several hundred variable account holders with potential claims with a value of $121,249,243.

Lindberg was convicted of bribery and illegal campaign contributions in 2020 and was sentenced to more than seven years in prison. But the convictions were overturned by a federal appeals court that set him free in July 2022. In May he was found guilty again and awaits sentencing.

In the federal case, Lindberg "and his co-conspirators misused $2 billion of company funds in their international scheme to defraud corporate victims, regulators, and policyholders", said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “Thousands of policyholders suffered substantial financial hardship as a result of Lindberg’s fraud scheme, which left multiple companies in or on the brink of liquidation. The Justice Department will not hesitate to hold corporate executives accountable when they threaten critical sectors of the economy, like the insurance industry, to enrich themselves.”

“Lindberg created a complex web of insurance companies, investment businesses, and other business entities and exploited them to engage in millions of dollars of circular transactions. Lindberg’s actions harmed thousands of policyholders, deceived regulators, and caused tremendous risk for the insurance industry,” said US Attorney Dena J. King for the Western District of North Carolina. “Today’s guilty plea affirms our commitment to protecting the public from predatory financial schemes and bringing to justice those who betray public trust for personal gain.”

Lindberg pleaded guilty to one count of conspiracy to commit offenses against the United States, including wire fraud, investment adviser fraud, and crimes in connection with insurance business, and one count of money laundering conspiracy. He faces a maximum penalty of five years in prison on the conspiracy to commit offenses against the United States count and 10 years in prison on the money laundering conspiracy count.

In addition to pleading guilty to these charges, on May 15, following a retrial, Lindberg was convicted by a federal jury in Charlotte of conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds for orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions, aimed at bribing the elected North Carolina Commissioner of Insurance to influence the regulation of Lindberg’s insurance companies. A sentencing date has not yet been set. A federal district court judge will determine Lindberg’s sentence in both cases after considering the US Sentencing Guidelines and other statutory factors in each case. Lindberg was remanded into the custody of the US Marshals.

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