Court appoints special master in Greg Lindberg fraud case

The court cited the complexity of the scheme and the burden on resources in its decision

Court appoints special master in Greg Lindberg fraud case

Legal Insights

By Kenneth Araullo

A US district court has appointed Joseph Grier as special master in the case against former insurance executive Greg Lindberg, citing the complexity of the fraud and money laundering scheme and the strain its resolution would place on court resources. 

Lindberg pleaded guilty in November to orchestrating an insurance fraud and money laundering scheme that misled regulators, harmed insurers and policyholders, and resulted in substantial financial losses.

The court order, issued in response to the case’s intricacy, outlines Grier’s responsibilities in overseeing the restitution process. 

Grier has been tasked with verifying and quantifying the losses sustained by each victim, including several insurance companies with thousands of affected policyholders.

He will also assess any compensation already received, identify assets available for liquidation, estimate values for non-liquid assets, and oversee the distribution of funds, according to a report from AM Best.

According to the court, restitution in this case presents significant challenges, as several affected insurance carriers are undergoing liquidation. Additionally, many of Lindberg’s business holdings are not readily convertible into cash, further complicating efforts to recover and distribute assets. 

The court noted that the scale of the deception and the burden of unwinding Lindberg’s financial activities would be unduly demanding for the government, probation office, and court clerks, reinforcing the need for a special master.

Grier will be responsible for providing regular updates to interested parties and will prepare quarterly statements detailing expenses and fees associated with the restitution process. 

According to the Justice Department, Lindberg’s scheme, which spanned from 2016 through at least 2019, defrauded insurance companies, third parties, and thousands of policyholders. 

Authorities stated that Lindberg and his co-conspirators invested more than $2 billion in loans and securities tied to Lindberg-affiliated businesses. They also made misleading statements and withheld material information from regulators, rating agencies, insurers, policyholders, and other involved parties.

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