An insurance executive, a company consultant, and two North Carolina political figures have been indicted for their alleged participation in a scheme to bribe the state's insurance commissioner.
The indictment charged Greg E. Lindberg, founder and chairman of Eli Global LLC and the owner of Global Bankers Insurance Group (“GBIG”); John D. Gray, a consultant for Mr. Lindberg; the chairman of the North Carolina Republican Party, Robert Cannon Hayes; and John V. Palermo, chairman of a North Carolina county political party and an Eli Global executive, with conspiracy to commit honest services wire fraud and bribery concerning programs receiving federal funds and aiding and abetting.
Mr. Hayes also was charged with three counts of making false statements to the FBI.
The indictment “outlines a brazen bribery scheme in which Greg Lindberg and his co-conspirators allegedly offered hundreds of thousands of dollars in campaign contributions in exchange for official action that would benefit [Mr.] Lindberg's business interests,” said Assistant Attorney General Brian A. Benczkowski. “Bribery of public officials at any level of government undermines confidence in our political system. The Criminal Division will use all the tools at our disposal – including the assistance of law-abiding public officials – to relentlessly investigate and prosecute corruption wherever we find it.”
“Thanks to the voluntary reporting of the North Carolina Commissioner of Insurance, we have uncovered an alleged scheme to violate our federal public corruption laws,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina. “Improper campaign contributions erode the public's trust in our political institutions. We will work with our law enforcement partners to investigate allegations of public corruption, safeguard the integrity of the democratic process, and prosecute those who compromise it.”
“These men crossed the line from fundraising to felonies when they devised a plan to use their connections to a political party to attempt to influence the operations and policies of the North Carolina Department of Insurance,” said Special Agent in Charge John A. Strong of the FBI Charlotte Field Office. “The FBI will root out any and all forms of public corruption. We remain committed to ensuring those who violate the public's sacred trust are held accountable.”
The criminal indictment alleged that in January 2018, the elected commissioner of insurance of the North Carolina Department of Insurance (“NCDOI”) reported concerns to federal law enforcement about political contributions and other requests made by Mr. Lindberg and Mr. Gray, and agreed to cooperate with the federal investigation that was initiated.
According to allegations in the indictment, from April 2017 to August 2018, Messrs. Lindberg, Gray, Palermo, and Hayes devised a scheme to defraud and deprive the citizens of North Carolina of the honest services of the commissioner, an elected state official, through bribery. As alleged in the indictment, the defendants engaged in a bribery scheme involving independent expenditure accounts and improper campaign contributions for the purpose of causing the commissioner to take official action favorable to Mr. Lindberg's company, GBIG. As alleged in the indictment, the defendants gave, offered, and promised the commissioner millions of dollars in campaign contributions and other things of value, in exchange for the removal of the NCDOI's senior deputy commissioner, who was responsible for overseeing regulation and the periodic examination of GBIG.
As alleged, during the time frame relevant to the indictment, Messrs. Lindberg, Gray, and Palermo and the commissioner held numerous in-person meetings at different locations, including in Statesville, North Carolina, and had telephonic and other communications with each other, and with Mr. Hayes, to discuss Mr. Lindberg's request for the personnel change in exchange for millions of dollars, and to devise a plan on how to funnel campaign contributions to the commissioner anonymously.
Prosecutors asserted that, to conceal the bribery scheme, Mr. Palermo set up, at the direction of Mr. Lindberg, two corporate entities to form an independent expenditure committee with the purpose of supporting the commissioner's re-election campaign and funded the entities with $1.5 million as promised to the commissioner. As alleged, at Mr. Lindberg and Mr. Gray's direction, Mr. Hayes caused the transfer of $250,000 from monies Mr. Lindberg had previously contributed to the North Carolina Republican Party of which Mr. Hayes was chairman, to the commissioner's re-election campaign.
The government alleged that, on or about August 28, 2018, FBI agents interviewed Mr. Hayes about his involvement with and knowledge of the alleged improper campaign contributions. During the interview, Mr. Hayes allegedly lied to FBI agents about directing funds, at Mr. Lindberg's request, from Mr. Lindberg's campaign contribution to the North Carolina Republican Party to the commissioner's re-election campaign; about having any discussions with the commissioner about Mr. Lindberg or Mr. Gray; and about discussing with the commissioner personnel issues related to the commissioner's office.
Learn more: Indictment.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].