A co-accused in a $75 million fraud based in Malta has pleaded guilty to conspiracy
News
American billionaire insurance magnate Greg Lindberg, who set up shop in Malta in 2016 and is now accused of defrauding investors out of $75 million through his Maltese company
Christopher Herwig, who is accused along with the billionaire insurance magnate Greg Lindberg who had set up shop in Malta with a lot of publicity, pleaded guilty to conspiracy to defraud the United States through a company set up in Malta which appears to -explicit purpose to run. the “elaborate” fraud.
The US Securities and Exchange Commission (SEC) in August charged Lindberg, Herwig and their Malta-based registered investment advisory company, Standard Advisory Services Limited, with defrauding clients with ‘more than $75 million through undisclosed transactions that benefited only themselves and their companies.
According to the SEC’s complaint, from July 2017 to 2018, Lindberg and Herwig, through Maltese Standard Advisory Services Limited (SASL), fraudulently induced their clients to enter into undisclosed transactions with related parties that were, according to the SEC’s charges, far from being in the best interest of their clients.
New court documents released Thursday detail the efforts of Herwig, Lindberg and a third employee to create a financial scheme to move money between various insurance companies and other businesses owned by Lindberg.
Herwig worked for the conglomerate from August 2010 to August 2020, according to court documents. The documents also claim that Herwig served as a director/trustee and chief investment officer/treasurer of the companies.
The court documents claim that the scheme took place from January 2016 until at least 2019. They claim that the scheme attempted to skim money from the various businesses for the benefit of Lindberg while hiding it from regulators at the Department of -Insurance of North Carolina.
The documents claim that Lindberg, Herwig and a third unnamed employee “extracted hundreds of millions of dollars from various insurance companies through a series of loans and related financial transactions to finance the acquisition and operation of others. [Lindberg] companies”.
This included skimming about $55 million from his companies through the scheme and using the money to buy a mansion for Lindberg and “tennis facility properties” in Chapel Hill.
The Shift reported at the end of August that LindbergHerwig, and the Standard Advisory incorporated in Malta had been accused of violating the anti-fraud provisions of the US Investment Advisers Act of 1940, and that the disgorgement together with the prejudgment interests, the penalties and permanent injunctions were being sought by US authorities.
Standard Advisory Services Limited was issued a Category 2 Investment Services License by the Maltese Financial Services Authority. At the end of September 2020, the license was canceled after it was surrendered “entirely voluntarily”, according to an MFSA statement at the time.
Malta-based SASL was registered with the SEC as an investment adviser from November 2016 until it withdrew its registration on 1 October 2019. Lindberg was indirectly owned by SASL, and Lindberg and Herwig were directors of SASL and members of SASL’s investment committee.
Lindberg also registered a reinsurance company in Malta, Standard Re, in April 2015. She held Class 1 and Class 2 insurance licenses issued by the MFSA before her license was surrendered by the same way at the end of 2018.
The directors of the Maltese company are Maltese citizen Joseph Grioli, a well-known businessman who founded Vodafone Malta, the American Marc Howard Greenspan, and the resident of Malta Thomas Schildhammer. Grioli has been on the board since it was formed in 2016.
The court documents released last week do not mention the “third employee” by name.
I never got a penny – Lindberg
Responding to the “false allegations about him that were included in the criminal acts of the Department of Justice against Christopher Herwig”, Lindberg came out swinging, insisting that the operations going on from Malta were perfectly legitimate.
“I have invested more than $500 million in my insurance companies. I have never received a penny of dividends. The allegation that I somehow defrauded them while I invested $500 million in them and got no dividends is completely absurd,” Lindberg said through a public relations agency on Thursday.
“I also hired more than 100 investment professionals, lawyers, and accountants and spent tens of millions of dollars on their compensation to ensure that the insurance reserves were invested according to the loan compliance plan of the affiliate that I personally drafted.”
He insisted that this detailed affiliate loan compliance plan mandated that the insurance investment team follow a full series of processes to comply with the laws and regulations governing this loans
Appearing to absolve himself of responsibility for the fraud, he added, “In this compliance plan I have appointed six individuals to the Investment Compliance Department and the Investment Underwriting Team of -Clearly defined insurance. I was not one of those individuals.”
“The government is claiming that the transactions were not disclosed, but we have provided emails showing that the transactions were disclosed to virtually everyone on the North Carolina insurer’s management team, including the company’s Chairman of the Board of management,” Lindberg spokeswoman Susan Susan said. Estrich.
“This case is simply to try to put pressure on Greg Lindberg and paint a negative picture of him in the press,” Estrich said. “There was no loss for anyone.”