Northstar Financial Annuity Losses: Investors May Have Options

Multiple investors have filed complaints regarding investments in Northstar Financial Services, a Bermuda company that offered variable annuities before entering bankruptcy proceedings, and whose owner was recently charged with corruption and bribery by federal prosecutors and securities regulators. According to a 2021 report by the Royal Gazette, Northstar Financial filed for bankruptcy in 2020 with only $8 million in assets, “unable to pay liquidation or redemption requests” to its investors. One attorney told the Gazette that he represented dozens of Northstar customers who had collectively lost more than $10 million.

What Is Northstar Financial Services?

Northstar Financial Services was a Bermuda-based investment company formed in the 1990s, according to the Royal Gazette, which offered “fixed- and variable-rate annuity and investment products.” In 2018 it was acquired by Global Bankers, an insurance company formerly owned by Greg Lindberg. In 2020,  Lindberg was convicted of bribery and public corruption “orchestrating a bribery scheme involving independent expenditure accounts and improper campaign contributions.” While he was sent to prison, his conviction was more recently overturned by an appeals court, with a retrial scheduled for March 2023, according to WRAL. As his case proceeds, Northstar Investors are trying to recover the funds they invested in the company, which was in liquidation proceedings as of August 2021.

What Are the Charges Against Northstar Owner Greg Lindberg?

The charges Lindberg of which Lindberg was convicted—and for which he is scheduled to be retried last year—included bribery and public corruption. “Greg Lindberg and [his consultant] John Gray undermined public confidence in our government by promising millions of dollars in campaign contributions in exchange for government decisions to benefit Lindberg’s business interests,” said a federal prosecutors in a news release about his conviction in 2020. “The defendants devised an elaborate plan to make a hefty campaign contribution to an elected official to secure favorable action.”

In 2022, after Lindberg was released from prison, the Securities and Exchange Commission charged him, his investment advisory Standard Advisory Services Limited, and another executive at the firm with “defrauding clients out of more than $75 million through undisclosed transactions that benefited themselves and their companies.” The SEC’s complaint alleged that through the firm, Lindberg and his fellow executive fraudulently caused their advisory clients to make unsuitable and undisclosed “related-party transactions,” that they misappropriated at least $57 million in their clients’ funds, and that the firm received at least $21.4 million in advisory fees related to these fraudulent transactions. “In an attempt to conceal the fraud,” the SEC charged, “Lindberg allegedly orchestrated the schemes through complex investment structures and a web of affiliate companies and allegedly used the proceeds to pay themselves or to divert the funds to Lindberg’s other businesses.”

Meanwhile in North Carolina, a judge ordered Lindberg earlier this year to cede control of his insurance companies to the state’s Department of Insurance, according to a report by Insurance Business America. The companies in question— Southland National Insurance Corporation, Bankers Life Insurance Company, Colorado Bankers Life Insurance Company, and Southland National Reinsurance Corporation—“were declared insolvent after Lindberg redirected their funds—as much as 40%—towards other investments.” He was ordered to give up control of the companies in 2019, but allegedly continued to withdraw more funds than he was permitted to withdrawn from them even after state authorities took over, per Insurance Journal. Lindberg is appealing the 2022 decision, according to WRAL. 

What’s Next for Northstar Investors?

For now, investors in annuities issued by the companies Lindberg owned will generally not see any payments until authorities complete the “rehabilitation” process, identifying and clawing back the funds that Lindberg allegedly diverted. “Investors who thought they had a safe port for their life savings can’t access that money unless they’re at least 95 years old,” WRAL notes, “or meet a hardship criteria that requires them to have $50,000 or less in liquid assets.”

Numerous investors have already filed complaints against the financial advisors and/or firms that recommended they invested in Northstar products. For instance, in June 2022 an investor alleged that Brooklyn-based Infinex Investments advisor Robert Leslie unsuitably recommended Northstar, seeking damages between $100,000 and $500,000. Coral Gables, Florida-based advisor Steve Berrocal, meanwhile, has received multiple investor complaints alleging he unsuitably recommended Northstar: one recently settled for $155,000, while another settled for $150,000.

You May Be Able to Recover Your Northstar Losses

Carlson Law represents investors involved in claims against financial advisors and investment firms throughout the United States. If you or a loved one have suffered losses investing in Northstar Financial Services, please call us at 888-976-6111 or complete our contact form for a free and confidential consultation.