Erez Law is currently investigating brokers from brokerage firms across the country who recommended their clients invest in annuities from Colorado Bankers Life Insurance. Investors across the country, including many elderly, retired, and conservative individuals, have suffered investment losses as a result of investments in Colorado Bankers Life annuities. Many investors risk some or all of their life savings tied to Colorado Bankers Life Insurance annuities.
Elderly and Retired Investors Cannot Access Funds from Colorado Bankers Life Insurance Annuities
It is alleged that 70,000 investors in the $2.2 billion in annuities are unable to withdraw their money, including many retired and elderly investors who were relying on dividends from those investments to sustain their income throughout their retirement years.
Life-insurance products are insured up to $250,000; however, investors aren’t paid until they are put into liquidation. The Wall Street Journal reported that “1,600 annuity owners wouldn’t be fully covered, because they collectively invested about $250 million more than their state’s reimbursement caps.” Public records indicate that many investors were not aware of the $250,000 insured cap for investments at an institution in the United States.
A Colorado Bankers Life Insurance annuities liquidation could be the third-costliest U.S. life-insurance failure, according to the Wall Street Journal.
It is alleged that his scheme involved moving $2 billion from the insurers to various companies that he controlled. It is also alleged that he used insurance funds to pay at least $689,000 to surveillance companies to monitor women with which he had a personal connection.
In March 2020, he was found guilty of promising $2 million in “campaign donations in exchange for the reassignment of the senior deputy overseeing Mr. Lindberg’s insurers.”
In August 2020, he was sentenced to seven years and three months in prison “for attempting to bribe a state insurance commissioner with campaign contributions to secure more favorable regulatory treatment for his insurers.” He was released from prison after 21 months, when the appeals court overturned his conviction. A retrial is scheduled for November 2023.
Greg Lindberg, who is the owner of Northstar Financial Services (Bermuda) Ltd., was indicted in February 2023 on federal charges that “he defrauded his insurers by lending $2 billion of their funds to companies in his private conglomerate, while allegedly siphoning off huge sums to finance his lavish lifestyle. He has pleaded not guilty and is out on bail,” according to the Wall Street Journal.
He was charged with 13 criminal counts, which included conspiracy, wire fraud, filing false insurance financial statements, and conspiracy to commit money laundering. Related to the charges, the government seeks forfeiture of $230 million and to seize several entities in his empire.
In March 2023, Massachusetts securities regulators began investigating a unit of Citizens Financial Group Inc. related to the sale of savings product offered by Greg Lindberg. Many representatives of Citizens Securities worked in Citizens Bank branches across the country. Citizens Bank was a seller of annuities from Colorado Bankers Life Insurance, the biggest Greg Lindberg insurer.
Public records indicate that in 2017 and 2018, Colorado Bankers increased its sales of fixed annuities; this was soon after Greg Lindberg acquired the company. These multi-year guaranteed annuities paid high-interest rates than other annuities, more in line with CD rates than typical annuities.
Investors would invest a lump sum for about five years, after which they would withdraw the original funds plus interest.
Brokers recommended these annuities due to the attractive interest rates they offered. These investments were marketed as “very safe,” and many investors invested large sums of money, including entire life savings, in these investments at the recommendation of their brokers.
In 2019, insurers were seized by North Carolina regulators; most withdrawals were frozen. Regrettably, for many annuity investors, their money is tied up by “Mr. Lindberg’s legal challenges to regulators’ efforts to liquidate the insurers. Mr. Lindberg is pushing for a sale of the business instead,” according to the Wall Street Journal.
According to the Wall Street Journal, a couple said “they believe Citizens misrepresented the financial health of Colorado Bankers and the risks of such an investment. They say their funds should have been put into two annuities of $200,000 each, to ensure they were completely covered by a state-based guaranty association for insurance products. In general, the industry-funded associations typically provide annuity owners $250,000 of protection.”
A retired couple said, “This is an unplanned-for catastrophe in retirement,” according to the Wall Street Journal article. The couple invested in Colorado Bankers Life annuity at the recommendation of their local Citizens Bank representative, who assured them that the investment was safe and their money would be easily accessible. When the couple tried to withdraw their funds in 2019 to purchase a new home, they learned their assets were frozen.
The Wall Street Journal reported that he is in court with North Carolina regulators, which seized his insurers in 2019; regulators are saying they should be liquidated.
Elderly and Retired Investors Seek Relief from Investment Losses
Investors across the country, including many elderly and retired individuals, have suffered investment losses as a result of investments in annuities from Colorado Bankers Life Insurance.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses suffered by its customers who received unsuitable investment recommendations to invest in annuities from Colorado Bankers Life Insurance.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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