Insurance Tycoon Greg Lindberg’s Bribery Case Heads to Court Bids by Lindberg and two fellow defendants to have charges dismissed fail Greg Lindberg bought life insurers in the U.S. and abroad and loaned at least $2 billion of their assets to entities he controlled. Photo: /Associated Press By Leslie Scism and Mark Maremont Jan. 31, 2020 3:28 pm ET Insurance mogul Greg Lindberg’s criminal trial on federal bribery charges is set to start Feb. 18, after a federal judge denied motions by Mr. Lindberg and two fellow defendants to dismiss charges against them. A self-proclaimed billionaire, Mr. Lindberg bought life insurers in the U.S. and abroad and loaned at least $2 billion of their assets to entities he controlled. He often used opaque shell companies as intermediaries to direct the funds. Mr. Lindberg and two associates are charged with honest-services fraud and bribery after they allegedly tried to bribe North Carolina Insurance Commissioner Mike Causey with $2 million in campaign contributions. They allegedly wanted him to replace a staff regulator who was overseeing Mr. Lindberg’s insurers with someone they deemed more favorable. Mr. Lindberg’s initial preferred candidate for the position was one of his own company executives, now a fellow defendant, according to an indictment unsealed in April 2019. Unknown to the defendants, the insurance commissioner, Mr. Causey, was cooperating with federal officials and recording the interactions. Mr. Lindberg’s insurance empire was the focus of a February 2019 investigative article in The Wall Street Journal. A fourth defendant, Robin Hayes, a former congressman and former chair of North Carolina’s Republican Party, has already pleaded guilty to a single count of lying to the Federal Bureau of Investigation. Along with the remaining defendants, he had initially been charged with conspiring to bribe Mr. Causey. The two remaining defendants alongside Mr. Lindberg are John D. Gray, a consultant to the executive, and John V. Palermo Jr., an executive for a Lindberg company. All three have pleaded not guilty. In a decision signed Thursday and entered into the court record Friday, Judge Max O. Cogburn Jr. ruled against motions to dismiss by the remaining defendants, writing that “there is a legally sufficient basis” to support the indictment. In September Mr. Lindberg had sought to dismiss the charges because, his attorneys argued, his actions fell short of criminal conduct in light of recent U.S. Supreme Court rulings. Criminal prosecutions of public officials and corporate executives involving honest-services fraud, or related statutes, have been controversial in the legal community. Recent Supreme Court cases have limited such prosecutions to cases involving an “official act,” Mr. Lindberg’s attorneys said in their September filing. According to their filing, Mr. Lindberg believed the regulator he sought to replace was biased and so replacing her wasn’t part of a plan to influence oversight of his insurers in a corrupt way. Judge Cogburn ruled that “staffing decisions generally—and the decision to assign an employee to regulate [Mr. Lindberg’s insurers] in particular—are a formal exercise of official power.” A spokesman for Mr. Lindberg said the executive had no comment on the ruling. Related ‘Active Interest’: Insurance Tycoon Spied on Women Who Caught His Eye Insurance Executive Greg Lindberg Indicted in Bribery Investigation Insurance Officials Pursue Control of Many of Greg Lindberg’s Firms North Carolina regulators have taken control of four of Mr. Lindberg’s main insurers, and those state-controlled insurers have asked a state court to appoint a receiver over hundreds of Mr. Lindberg’s private entities. The private entities together owe those insurers $1.3 billion. The insurers’ court filings allege that some of the private entities are mismanaged and that funds were diverted to Mr. Lindberg’s personal uses. Mr. Lindberg denied those allegations and said none of his private entities is in default on obligations to the insurers. Mr. Lindberg maintains the effort to appoint a receiver is a politically motivated move by Mr. Causey, the insurance commissioner. Mr. Causey has previously stated that he “had no political motivation whatsoever and was strictly doing regulatory oversight to protect policyholders,” and declined additional comment because of the pending court case. A separate federal probe is continuing to investigate potential fraud in Mr. Lindberg’s business dealings, court records show. Write to Leslie Scism at leslie.scism@wsj.com and Mark Maremont at mark.maremont@wsj.com https://www.wsj.com/articles/insurance-tycoon-greg-lindbergs-bribery-case-heads-to-court-11580502523