IN THE UNITED STATES DISTRICT COURT ARI-OWE NC FOR THE WESTERN DISTRICT OF NORTH CAROLINA MAR 7 STATESVILLE DIVISION Us Dis 8 2079 OFTVC UNITED STATES OF AMERICA DOCKET NO. VS. BILL OF INDICTMENT 1) GREG E. LINDBERG, Violations: 2) JOHN D. GRAY, 18 U.S.C. 1349 3) JOHN V. PMJERMO, JR., and 18 use 666(a)(2) -4) ROBERT CANNON HAYES. 18 use 1001(a)(2) 18 U.S.C. 2 TPIE GRAND JURY CHARGES: Relevant Individuals and Entities At all times material to this Bill of Indictment, unless otherwise stated: 1. The North Carolina Department of Insurance was a department established under the North Carolina General Statutes and charged with the execution of laws relating to insurance and other subjects. The chief Of?cer of the NCDOI was the elected Commissioner of Insurance 2. The North Carolina General Statutes provided that the COMMISSIONER was responsible for ensuring that the statutes governing insurance Were faithfully executed, and further provided that he Commissioner Shall appoint or employ such other deputies, actuaries, economists, ?nancial ?nancial examiners . . . accountants . . . and other employees that the Commissioner considers to be necessary for the proper execution of the work of the Department.? As an elected of?cial, the COIVMSSIONER swore to ?be faithful and bear true allegiance to the State Of North Carolina? when he took of?ce in January 2017. Page 1 of 23 Case Document 3 Filed 03/18/19 Page 1 of 23 a. In January 2018, the COMMISSIONER reported to federal law enforcement of?cials concerns about political contributions and requests made by GREG E. LINDBERG and JOHN D. GRAY. The COMMISSIONER agreed to cooperate with the then?initiated federal investigation, and did so in the ensuing months. 3. Defendant GREG E. LINDBERG was a resident of Durham, North Carolina, the founder and Chairman of Eli Global, LLC, an investment company, headquartered in Durham, North Carolina, and the owner of Global Bankers Insurance Group a managing company for several insurance and reinsurance companies, headquartered in Durham, North Carolina. 4. GBIG managed several insurance companies across the United States and was subject to regulation by the NCDOI. Beginning in or about September 2017, and continuing through in or about February 2018, GBIG was subject to an ongoing periodic examination conducted by the NCDOI pursuant to North Carolina General Statute 58-2-131, which provides that the NCDOI shall conduct a ?nancial examination of every domestic insurer when ?prudent for the protection of the policy holders or the public,? but ?not less frequently than once every ?ve years.? Following the periodic investigation, GBIG was subject to a remediation agreement it signed with the NCDOI in or about May 2018. 5. Defendant JOHN D. GRAY was a resident of Chapel Hill, North Carolina, and a consultant for LINDBERG. 6. Defendant JOHN V. PALERMO, JR. was a resident of Pittsboro, North Carolina, the Vice President of Special Projects at Eli Global, and the Chairman of a Chatham County political party. 7. Defendant ROBERT CANNON HAYES was a resident of. Concord, North Carolina, and the Chairman of a North Carolina state political party (?North Carolina State Political Party 8. North Carolina election law set contribution limits for contributions to candidates ($5,200 per election in 2018). NC Gen. Stat. and This limit, however, did not apply to ?any national, State, district or county executive committee of any political party.? NC. Gen. Stat. Nor did it apply to any ?independent expenditure committee.? NC. Gen. Stat. North Carolina law also prohibited conduit contributions or Page 2 of23 Case Document 3 Filed 03/18/19 Page 2 of 23 contributions made anonymously or in the name of another. NC. Gen. Stat. COUNT ONE 18 U.S.C. 1349 (Conspiracy to Commit Honest Services Wire Fraud) 9. Paragraphs 1 through 8 are realleged and incorporated herein by reference. 10. From in or about April 2017, through in or about August 2018, in Iredell County, in the Western. District of North Carolina, and elsewhere, the defendants, (1) GREG E. LINDBERG, (2) JOHN D. GRAY, (3) JOHN v. PALERMO, and (4) ROBERT CANNON HAYES, did knowingly combine, conspire, confederate, and agree with one another, and with others known and unknown to the Grand Jury, to devise and intend to devise a scheme and arti?ce to defraud and to deprive, by means of material false and fraudulent pretenses, representations, and promises, and to transmit and cause to be transmitted by means of wire communication in interstate commerce, any writings, signs, signals, pictures, and sounds for the purpose of executing the scheme and artifice to defraud and deprive, that is, to deprive North Carolina and the citizens of North Carolina Of their intangible right to the honest services of the COMIVHSSIONER, an elected. State official, through bribery, in violation of 18 U.S.C. 1343 and 1346. A. The Scheme to Defraud 1. From in or about April 2017, through in or about August 2018, in Iredell County, in the Western District of North Carolina, and elsewhere, the defendants, GREG E. LINDBERG, JOHN D. GRAY, JOHN V. PALERMO, and ROBERT CANNON HAYES, devised and intended to devise a scheme and arti?ce to defraud and to deprive North Carolina and the citizens of North Carolina of their intangible right to the honest services of the SIONER, an elected State Official, through bribery. Page 3 of 23 Case Document 3 Filed 03/18/19 Page 3 of 23 B. The Purpose of the Scheme 12. The purpose of the scheme was for the defendants to unlawfully cause the COMMISSIONER to take of?cial action favorable to companies through bribery of the C. The Manner and Means of the Scheme 13. The manner and means by which the defendants carried out the scheme included, but were not limited to, the following: 14. The defendants corruptly gave, offered, and promised things of value to the including millions of dollars in campaign contributions and through an independent expenditure committee, in exchange for speci?c official action favorable to GBIG, including the removal of the Senior Deputy Commissioner of the NCDOI responsible for overseeing the regulation, including the pending periodic examination, of GBIG (?Senior Deputy Commissioner 15. LINDBERG, GRAY, and PALERMO surreptitiously met with the at various locations throughout North Carolina, including the Statesville Regional Airport in Statesville, North Carolina, and residence in Durham, North Carolina, to discuss request for the removal of Senior Deputy Commissioner A in exchange for millions of dollars in campaign contributions to the 16. In order to conceal the scheme, the defendants took steps to anonymously funnel the campaign contributions to the COMMISSIONER in a manner to avoid publicly disclosing that they had come from LINDBERG. a. At direction, PALERMO set up two corporate entities to form an independent expenditure committee with the purpose of supporting the campaign for re?election. LINDBERG funded the two corporate entities?as he and GRAY promised to the .5 million. b. At and direction?and as an installment On the $500,000 promised to the COMIVHSSIONER by LINDBERG and caused the transfer of $250,000, from monies LINDBERG had previously contributed to North Carolina State Page 4 of 23 Case Document 3 Filed 03/18/19 Page 4 of 23 Political Party A, to the campaign for re- election. 17. In addition, over the course of the scheme, the defendants concealed that they had provided campaign contributions to the COMMISSIONER in exchange for the favorable personnel action. D. Acts in Furtherance of the Scheme 18. The acts in furtherance of the scheme included, but were not limited to, the following: Initial Attempts to Contact the COMMISSIONER 19. On or about April 18, 2017, LINDBERG attempted to contribute $10,000 to the campaign for re-election, but the COMMISSIONER rejected contributions. 20. In or about August 2017, GRAY requested that HAYES schedule a meeting between the COMMISSIONER and LINDBERG and GRAY. HAYES con?rmed that he was attempting to do so. Indeed, in November 2017, HAYES sent a text message to the suggesting, think should consider a face to face with Greg 21. On or about November 13, 2017, HAYES sent an email to PALERMO regarding political matters stating, in part, ?If agree,I?ll suggest put the money in the party and we will put it in races at your direction.? 22. On or about November 19, 2017, GRAY and PALERMO exchanged emails about the identity of Senior Deputy Commissioner A. 23. On or about November 20, 2017, LINDBERG, GRAY, and GBIG executives met with the During the meeting, LINDBERG asked the COMIVIISSIONER to call several insurance commissioners from other states where LINDBERG was attempting to complete acquisitions to vouch for LINDBERG and GBIG. The COMIVIISSIONER agreed to make those phone calls, and GRAY later called the COMMISSIONER to explain that LINDBERG had contributed $500,000 to North Carolina State Political Party A, $110,000 of which was earmarked for the COMMISSIONER. GRAY also stated that LINDBERG wanted to host a ?indraiser for the COMIVIISSIONER. Page 5 of 23 Case Document 3 Filed 03/18/19 Page 5 of 23 24. On or about November 27, 2017, GRAY sent a text message to the COMMISSIONER requesting a private meeting: ?We spoke of an opportunity to speak privately after our recent meeting I am interested in how when this could work in your schedule.? 25. On or about November 28, 2017, GRAY and PALERMO exchanged text messages about hosting a fundraiser for the COMIVIISSIONER, which the COMIVHS SIONER declined through a representative. Use of Another Public Of?cial to Contact the COWISSIONER 26. Between on or about February 1, 2018, and on or about February 4, 2018, GRAY and PALERMO exchanged text messages explaining that political contributions to an elected public of?cial (?Public Of?cial were on hold in light of recent publicity about contributions. GRAY ?rrther stated, explained we should meet our agreement as [Public Of?cial has no in?uence with [the Now I?m thinking a full explanation is warranted so [Public Of?cial has the opportunity to consider conf. with [the if he knows hin.? 27. GRAY later called Public Of?cial A and, on or about February 5, 2018, sent a text message to LINDBERG stating, have discussed our NCDOI matter with [Public Of?cial Please call before your trip to Greensboro today so we can discuss details. Excellent opportunity available for support here.? On the same date, LINDBERG made a $150,000 contribution to a political committee supporting Public Of?cial A. 28. On or about February 7, 2018, Public Of?cial A called the to explain that LINDBERG was doing good things for North Carolina business. 29. On or about February 12, 2018, PALERMO sent an email to LINDBERG and GRAY stating, ?Just between the [Public Of?cial has already made two calls on our behalf and is trying to help us move the ball forward. I was also told that the will be going to [Public Official Page 6 of 23 Case Document 3 Filed 03/18/19 Page 6 of 23 Complaints About the Senior Deputy Commissioner 3 0. On or about February 14, 2018, LINDBERG and GRAY met with the COMMISSIONER in a private conference room at the Concord Regional Airport in Concord, North Carolina. Leading up to the meeting, GRAY explained that the meeting would be secret, and told the that GRAY and LINDBERG would enter the facility through a different door from the COMIVIISSIONER so that nobody would see them together. 31. During the meeting, LINDBERG complained about various issues with the NCDOI, including Senior Deputy Commissioner A. LINDBERG stated that she was ?deliberately and intentionally and maliciously hurting my reputation with other regulators,? and that she?s ?been lying to you to, to hurt my bad name.? 32. LINDBERG and GRAY suggested that the COMIVIISSIONER hire PALERMO at the NCDOI in place of, or in a superior role to, Senior Deputy Commissioner A. 33. To facilitate this personnel action, GRAY suggested that the COMMISSIONER meet with PALERMO in private at a closed restaurant in Chapel Hill, North Carolina. 34. On or about February 26, 2018, the COMMISSIONER met PALERMO at the closed restaurant in Chapel Hill, North Carolina. During the meeting, PALERMO suggested that the COMIVIIS SIONER hire PALERIVIO onto the NCDOI staff and LINDBERG would pay PALERMO a substantial exit package to make up for the difference in compensation between his salary at Eli Global and his salary at the NCDOI. LINDBERG Offers the Bribe 35. On or about March 5, 2018, LINDBERG, GRAY, PALERMO, and the SIONER met at the Statesville Regional Airport in Statesville, North Carolina. During the meeting, the parties discussed various pending matters between GBIG and the NCDOI. 36. When the COMMISSIONER informed LINDBERG, GRAY, and PALERIVIO that he might be able to hire PALERMO as early as April lst, LINDBERG responded, ?that?d be great, that?s a homerun.? LINDBERG also Page 7 of 23 Case Document 3 Filed 03/18/19 Page 7 of 23 con?rmed that he would provide PALERMO with an exit package to compensate him. 37. GRAY informed the that he should have PALERMO report directly to him so nobody at the NCDOI could question what PALERMO was doing, and ?if you could set it so that if, if [Senior Deputy Commissioner stays where she is, she doesn?t breathe a word outside that of?ce, or send a slip of paper outside that of?ce, that is not reviewed ?rst by John. 38. The COMMISSIONER asked to speak with LINDBERG alone, and during that portion of the meeting, the COMIVIISSIONER asked LINDBERG, ?What?s in it for me? What can you do to help that?s not gonna be . . . under the radar screen?? LINDBERG responded that he would create an independent expenditure committee to support the re-election and fund it himself with $1 million to $2 million. 39. Following the meeting, GRAY called the CONLMISSIONER to thank him and called the meeting a ?fantastic result.? During the call, GRAY stated, ?Well, I?m gonna tell you somethin?. And this is not to in?uence you in any way, shape, or form. But if?if?if we get this-if we get this current [?nancial examination report] business put to bed and we get John there so he can help you be that, as I say, the most successful insurance commissioner in my lifetime, there will be at least a million dollars somewhere in your re- election. I can tell you that. At least a million.? 40. On or about March 13, 2018, PALERMO sent GRAY an email comparing 501(c)(4) and 527 committees (referring to designations for certain organizations that can engage in political activity under the Internal Revenue Code), which were the corporate structures for the proposed independent expenditure committee offered by LINDBERG to the COMIVIISSIONER. After exchanging emails with LINDBERG about the subject, GRAY informed PALERMO that non?disclosure was ?a must.? LINDBERG Offers Alternative to Hiring PALERMO 41. On or about March 27, 2018, the COMMISSIONER met with LINDBERG, GRAY, PALERMO, and others at the GBIG headquarters in Durham, North Carolina. During the meeting, the COMMISSIONER asked to speak with LINDBERG alone. Page 8 of 23 - 1 Case Document 3 Filed 03/18/19 Page 8 of 23 42. During that portion of the meeting, the COIVIMISSIONER informed LINDBERG that he did not think it would be a good idea to hire PALERMO at the NCDOI, as it would be well known that PALERMO came from company and was liable to end up in the newspaper. 43. LINDBERG agreed and offered instead that ?we recruit someone brand new to the Department with the same skill set.? Later in the meeting, LINDBERG offered that the COMMISSIONER should instead move Senior Deputy Commissioner A to another Division of the NCDOI and move the head of the other Division (?Division Head to Senior Deputy Commissioner A?s position. Further Discussions About the Independent Expenditure Committee 44. On or about May 2, 2018, LINDBERG and the COMMISSIONER spoke on the telephone about the status of the independent expenditure committee. LINDBERG stated that ?we?re ready? to send $200,000 through North Carolina State Political Party A as soon as the COMMISSIONER was ready to receive it, and ?we?ll just send that to Robin HAYES and he can do a candidate directed donation from there.? He further stated that ?we?ve got a million we?re planning on putting into this independent expenditure committee,? and the independent expenditure committee would be administered by two individuals related to GRAY and PALERMO. 45. After that discussion, LINDBERG stated that the ?only other open item was? the swap of Division Head 1 selected by LINDBERG with Senior Deputy Commissioner A. 46. On or about May 16, 2018, LINDBERG, GRAY, and the COIWMISSIONER met at residence in Durham, North Carolina. During the meeting, the CONIMISSIONER asked about the status of the independent expenditure committee, and LINDBERG asked about the exchange of Division Head 1 with Senior Deputy Commissioner A. LINDBERG further offered, ?Leave [Division Head 1] where she is and just tell her that she?s going to handle our stuff, we?re good to go.? 47. At the same meeting, LINDBERG and GRAY stated that they were willing to transfer $5 00,000 to the campaign through North Carolina State Political Party A. GRAY then stated, ?But if, if [Division Page 9 of 23 Case Document 3 Filed 03/18/19 Page 9 of 23 Head 1] could be the lead ?nancial analyst, the, the problems that, that we are experiencing will disappear.? 48. LINDBERG later summarized, ?The bottom line is we hear you loud and clear on [the name of the person the COMNIISSIONER provided to run the independent expenditure committee]; the [North Carolina State Political Party thing; and I think the only ?nal thing to put all this the, the muck, is to get, to get us over to [Division Head 49. In a telephone call following the meeting, GRAY told the that he had a $500,000 check for North Carolina State Political Party A that would be for the bene?t of the COMMISSIONER. 50. On or about May 16, 2018, LINDBERG wrote a $500, 000 check to . North Carolina State Political Party A. HAYES Discusses the Bribe with the COMMISSIONER 51. On or about May 21, 2018, HAYES and the COMMISSIONER spoke on the telephone. During the call, the COMIVIISSIONER asked, ?Did John . . . mention anything to you about what they?re doing?? HAYES con?rmed, ?Yeah, we are, more than happy to help, so, when all that comes through we?ll be glad to ?gure out the best way to, do it.? Later in the call, the COMMISSIONER stated, ?John and Greg LINDBERG had pledged, to, you know, they had a half million dollars the other day when I was meeting with them and they said that, you know, cthis is what we?re going to give to the Party so . . . that they can give a check to you.?? The COWISSIONER also told HAYES about the independent expenditure committee promised by LINDBERG, and HAYES assured that ?they always do what they say they?re going to do.? 5 2. During the call, HAYES then raised the personnel change requested by LINDBERG, stating, ?Well, the thing that I heard that I think is important is, and I don?t know enough about it to really spoke intelligently, but there were some personnel issues, that they were hoping that you would, and I don?t even know the lady that was apparently really, really good, in ?nancial analysis, that they would like to see put back into that Department to make sure that things got done that needed to get done.? Page 10 of 23 Case Document 3 Filed 03/18/19 Page 10 of 23 Establishment of the Independent Expenditure Committee 53. On or about May 22, 2018, PALERMO sent an email to the COMMISSIONER entitled, ?Special project,? in which he requested certain information necessary to establish the independent expenditure committee. 54. On or about May 25, 2018, PALERMO sent an email to LINDBERG and GRAY stating that the independent expenditure committee to support the would be ready in two weeks. 55. On or about May 29, 2018, LINDBERG, GRAY, and the COMMISSIONER met again at residence in Durham, North Carolina to discuss the personnel move and the independent expenditure committee. 56. At the meeting, the COMMISSIONER complained about the changing amounts of money LINDBERG had offered, and the manner in which North Carolina State Political Party A was coordinating the $5 00,000 contribution to the COMMISSIONER. 57. During the meeting, GRAY stated, ?If we want to put it in these terms, if you?re willing to have [Division Head 1] handle everything from Global Bankers Insurance Group, then we?ll . . and LINDBERG interjected, ?We?ll put the money in the bank.? LINDBERG and. GRAY then called PALERMO and. discussed. the timeline to create and fund the independent expenditure committee. During the discussion with PALERMO, LINDBERG con?rmed the $1.5 million he would put into the independent expenditure committee and the $500,000 contribution that would be made through North Carolina State Political Party A, bringing the total contribution to the campaign to $2 million. 5 8. After the call with PALERMO, the meeting between LINDBERG, GRAY, and the COMMISSIONER continued, and GRAY asked, ?What do we do with [Division Head The COMMISSIONER responded, ?I?ll make the switch when we all get this . . and LINDBERG interj ected, ?Get the check cleared.? When the COMMISSIONER con?rmed, LINDBERG responded, ?That?s a homerun.? 59. After the meeting, GRAY sent the contact information for the campaign treasurer to LINDBERG, PALERMO, and Page 11 on3 Case Document 3 Filed 03/18/19 Page 11 of 23 HAYES. The next day, HAYES sent the campaign treasurer an email requesting the wire transfer information for the campaign. The campaign treasurer responded on or about June 6, 2018, and North Carolina State Political Party A transferred $10,000 to the COMMIS campaign on or about June 15, 2018, and another $10,000 one month later, on or about July 16, 2018. 60. On or about June 7, 2018, PALERMO sent LINDBERG an email about the two corporate entities he had established to form the independent expenditure committee in support of the On or about June 8, 2018, wrote a check to one of the entities for $500,000 and another check for $1.0 million to the other entity. PALERMO cashed both checks, and on or about June 1 l, 2018, PALERMO sent an email to LINDBERG and GRAY stating, ?In essence, for you conversations with [the the 2 entities are ready to go.? 61. On or about June 19, 2018, GRAY told. the COMMISSIONER that the independent expenditure committee had been funded with $1.5 million. LINDBERG, GRAY, and PALERMO Further Push the COMMISSIONER 62. On or about June 29, 2018, LINDBERG sent an email to various individuals, including PALERIVIO, stating, ?We are shutting down donations until we see some improvement in the NC DOI staf PALERMO forwarded the email to GRAY. 63. On or about July 6, 2018, PALERMO sent an email to LINDBERG that began, ?For Internal Use Only.? 1n the email, PALERMO stated that he had lunch with Public Of?cial A and ?took the opportunity to talk to him about our issue with the PALERMO went on to state, think [Public Of?cial got the message and will reach out to [the over the weekend[Public Of?cial A?s] words: ?[The needs to man?up and do what he agreed to?? Later in the email, PALERMO stated: In this case, John Gray and I are in agreement, when we have a request, and think something has been agreed to, we need to have an end date for it to happen. Otherwise, there is no sense of urgency to get it accomplished. I also wanted you to know that the two entities Page 12 of 23 Case Document 3 Filed 03/18/19 Page 12 of 23 we agreed on to be set up, are, and the ?rst board meeting is going to be held on July 18th. PALERMO ended the email by asking to attend the next scheduled meeting with the SIONER to ?listen in and participate,? and recommending that GRAY call the COMMISSIONER before Public Of?cial A. LINDBERG responded ?Good info,? and invited PALERMO to attend. the meeting. GRAY responded following email, ?Good plan here,? and con?rmed that he would call the COMMISSIONER 64. On or about July 9, 2018, PALERMO sent a text message to Public Of?cial A asking if he was able to speak with the CONIMISSIONER. Later, PALERMO sent another text message to Public Of?cial A. stating that the COMMISSIONER had cancelled a meeting. Public Of?cial A sent a text message back stating that he would. call the COMMISSIONER. On the same date, Public Of?cial A called the COMMISSIONER and stated that LINDBERG, GRAY, and PALERMO seemed anxious to ?nd out if the COMMISSIONER had ?red or moved someone at the NCDOI. 65. On or about July 9, 2018, the COMIVIISSIONER called GRAY to inquire about the call from Public Of?cial A. During the call, GRAY assured the COWISSIONER that he had personally delivered a $5 00,000 check to North Carolina State Political Party A, and LINDBERG had written checks for the other $1.5 million to the independent expenditure committee. GRAY then asked about moving Division Head 1 into a position to handle GBIG matters. The COMMISSIONER agreed to move forward with that once we ?get all this other stuff straigh 66. On or about the same date, PALERMO sent a text message to GRAY asking, ?Btw. You [s]aid [the was committed to moving [Senior Deputy Commissioner . . . Did you get a date?? GRAY con?rmed that he and LINDBERG would discuss that ?lrther with the COMMISSIONER during the last week of July. 67. On or about July 17, 2018, PALERMO sent an email to LINDBERG regarding support for political candidates and the political committees. In the email he stated, ?I?m sure [the is going to make the changes he agreed to as long as we set in place a time line for it to happen. I do not think he will walk away from the opportunity in front of him. . . . I am sure [the is going to do what should be in his best interest.? Page 13 of 23 Case Document 3 Filed 03/18/19 Page 13 of 23 LINDBERG responded, copying GRAY, ?Thanks John. . .will decide on this after we see some progress.? LINDBERG and GRAY Direct HAYES to Transfer the Bribe 68. On or about July 25, 2018, LINDBERG, GRAY, and the COMMISSIONER met again at residence in Durham, North Carolina to discuss a ?date certain? for the personnel move and the status of the campaign contributions. 69. During the meeting, the COMMISSIONER stated that he was not happy with the independent expenditure committee, as it had taken too long to set up and was likely to get publicity given recent publicity about 8 campaign contributions. The COMMISSIONER requested something that he could control instead. 70. In response, GRAY offered, ?Let?s do it through NC, [North Carolina State Political Party That way it?s not traced back to Greg GRAY then asked when the personnel change could take place, and stated, ?There?s ?ve-hundred thousand at the [North Carolina State Political Party Two-hundred fifty?thousand of that can go immediately to your campaign account. And the other two?hundred ?fty-thousand can go when you want it.? Throughout the conversation, GRAY and LINDBERG offered to ligfjj transfer $250,000 from North Carolina State Political Party A to the campaign immediately, followed by another $250,000 it'll-? after Senior Deputy Commissioner A was moved. LINDBERG then stated that he would contribute $250,000 through North Carolina State Political Party A to the COMMISSIONER each quarter to make up the remainder of the $1.5 million. 72. GRAY summarized, ?Well you?re gonna have ten?thousand plus two-hundred ?fty-thousand, quickly, if we have, if we have your assurance and a date certain by which the [Division Head staff realignment can occur, then the entirety of that ?ve hundred thousand will go right into your account.? And, LINDBERG stated, ?Ok, so resolved. You?ll get on the horn with Robin right away. Get that check over to [the now. And then by the end of August we?ll get you the balance, and we?ll get [Division Head Page 14 of 23 Case Document 3 Filed 03/18/19 Page 14 of 23 73. GRAY then called HAYES, while LINDBERG and the were still present, to discuss the transfer of $250,000 from North Carolina State Political Party A to the campaign. During the call, GRAY stated, ?We?ve come to the conclusion that it would be better for all put funds in the [North Carolina State Political Party and can, can work out . . . what goes to [the and what I need is for [the to get a transfer from the [North Carolina State Political Party in the amount of two? hundred and ?fty-thousand this week.? HAYES responded, ?Ok, well if that?s what you want looks a little odd to have that much at one time. You know, we were talking about putting it over, you know, so much a month, so it didn?t jump out, but that?s what you want to do, we can do it.? GRAY stated, ?That?s what I recommend, [the what do you say?? The COIVIMISSIONER responded, ?Yes.? GRAY then asked, ?Greg?? LINDBERG responded, ?That works for me.? GRAY then said, ?If you could do that, we would appreciate it.? HAYES responded, ?Sure.? And, GRAY followed up, ?We?ll get with you and um, understanding that this is all con?dential. . . HAYES responded, ?Yeah, oh, absolutely.? GRAY continued, ?We?re gonna, we?re gonna try to help [the build his campaign fund, but we think doing it through the [North Carolina State Political Party is probably the way that creates the least amount of consternation for all of us.? HAYES responded, ?Yeah, well, you know, again, my concern, any large amount like that?s gonna draw attention, nothing wrong with it, but they?ll see it and somebody will start asking questions, and particularly, given the fact that he doesn?t have to run again until what . . . 2020money at one time in there right now, then, they gonna [say], ?well, why . . . you don?t have a campaign now.?? But, HAYES con?rmed, ?Whatever you all want to do, we?ll do.? HAYES later stated, ?All I?m doing is raising a couple points that are my obligation?have you thought of this?but when you say do it, that?s easy, that?s easy. . . . Alright, I?ll get ?er done.? 74. On or about July 26, 2018?the very next day?North Carolina State Political Party A transferred $230,000 to the campaign account. When combined with the $20,000 previously transferred, the total transferred was $250,000. 75. On or about July 31, 2018, LINDBERG sent an email to PALERIVIO, copying GRAY, directing him not to spend any of the money LINDBERG deposited into the independent expenditure committee: ?Hi John, please don?t spent any of the cash in the 527 and 501c4. . . . Depending on Page 15 of 23 Case Document 3 Filed 03/18/19 Page 15 of 23 what happens we may refund the money to me.? GRAY, PALERMO, and HAYES Con?rm the Transfer to the COMMISSIONER 76. On or about August 2, 2018, GRAY spoke with the COMMISSIONER to con?rm that the wire transfer had been made of the ?rst $250,000 installment, and to inquire about the status of the personnel move. He asked, ?The way we left it, you would, you would make the staff transition, and soon after that we would transfer the other part, is that satisfactory?? GRAY con?rmed that they had agreed to transfer half of the $500,000 into the campaign account immediately and half after the personnel change had occurred. At the end of the call, howeyer, GRAY asked, ?Do you want the other part of that money, is it necessary for it to be there before you make the realignment?? The COMMISSIONER responded, ?I?d like to have [the second $250,000 installment] in there, you know, end, end of August, somewhere in that last week of August. But I?ll, I?ll continue working on the realignment.? GRAY replied, ?Well, if you get the realignment done in. August, we?ll get the other part in there, um, um, on or before the last day of August.? The COMMISSIONER agreed and GRAY responded, ?I?m delighted.? 77. On or about August 3, 2018, PALERMO sent an email to GRAY con?rming that the campaign treasurer had received. the recent $230,000 wire transfer from North Carolina State Political Party A. Soon thereafter, GRAY sent the COMIVIISSIONER a text message stating, must communicate with you so I can assure Greg all is appropriate with our Wed. agreement.? He further sent the COMMISSIONER a screenshot con?rmation of the wire transfer from North Carolina State Political Party A to the campaign, which he, PALERMO, and HAYES received Via email from a representative of North Carolina State Political Party A the night before. 78. On or about August 3, 2018, HAYES also called the COIVLMISSIONER to con?rm receipt of the $230,000 transfer. During the call, HAYES stated, ?Okay well, I want to be sure, cuz things are working nicely and they was a lot of concern.? 79. On or about August 4, 2018, PALERMO sent a text message to GRAY con?rming that he spoke to HAYES, and ?Robin spoke to [the . . . Not sure the entire message was delivered, Page 16 of 23 Case Document 3 Filed 03/18/19 Page 16 of 23 however he did con?rm that [the said he is on track for the end of the mont 80. On or about August 9, 2018, GRAY forwarded PALERMO a series of communications he had with the PALERMO responded via text message: ?It?s a comedy of errors that could only happen with [the the helm. . . . Frankly, I?m pissed as a really good initiative is on hold because of a donation and a staff move that might not help.? HAYES Lies to the Federal Bureau of Investigation 81. On or about August 28, 2018, agents from the Federal Bureau of Investigation approached GRAY to interview him in connection with this matter. Following the interview, at approximately 2:50 GRAY called HAYES. During the call, GRAY asked, got a call from the FBI relative to the money transfers from [North Carolina State Political Party to [the campaign account . . . do we have a problem here?? HAYES responded, don?t think so, but they called me a minute ago and I?m in Beaufort waiting on them. I?ll let you know. . . . I didn?t have any idea what was on their mind, but now you?ve given me a clue.? GRAY later stated, ?Well . . . I?m just wondering about it, because there was a phone call that I made, and we discussed [North Carolina State Political Party transferring some money at [the COMMIS request, and I?m just wondering if that?s a problem.? HAYES responded, ?Shouldn?t be, but I?ll let you know. . . . Stand down till you hear from me.? 82. On the same date, at approximately 3 :00 pm, agents from the Federal Bureau of Investigation arrived. to interview HAYES. During the interview, the agents asked HAYES about $500,000 contribution to North Carolina State Political Party A. Speci?cally, they asked, ?Have you and Mr. LINDBERG, or anybody who represents Mr. LINDBERG, had any discussions about that particular contribution . . . like what his expectations are regarding those funds?? HAYES responded, ?Absolutely not.? To confirm, the agents then asked HAYES, ?With respect to this most recent large contribution he made, which is $500,000, he didn?t direct you anywhere where that money would go?? HAYES responded again, ?Absolutely not.? The agents then asked HAYES, ?Did anyone associated with him or his organization direct you where that money would go?? HAYES again responded, Later, HAYES was asked, ?Has ever called, even just as a friend, and asked you to do anything for Mr. HAYES responded, ?Nothing like along the Page 17 of 23 Case Document 3 Filed 03/18/19 Page 17 of 23 lines of directing money, no.? Still later, HAYES was asked, ?You know very clearly that if Mr. LINDBERG put $500,000 in [North Carolina State Political Party A]?s account and then tells Robin HAYES. . HAYES interrupted, ?Mr. LINDBERG did not tell me.? 83. Additionally, during the interview, the agents asked HAYES about conversations he had with the SIONER. Speci?cally, the agents asked, ?Have you talked with [the about Mr. or Mr. HAYES responded, HAYES was then asked, ?Have you talked with [the about personnel in his of?ce?? HAYES responded, HAYES was then asked, ?About personnel problems he has in his of?ce?? HAYES again responded, E. Execution of the Scheme 84. On or about each of the dates set forth below, in Iredell County, in the Western. District of North Carolina, and elsewhere, the defendants, GREG E. LINDBERG, JOHN D. GRAY, JOHN V. PALERMO, and ROBERT CANNON HAYES, for the purpose of executing the above?described scheme and arti?ce to defraud and deprive, transmitted and caused to be transmitted by means of wire communication in interstate commerce the writings, signs, signals, pictures, and sounds described. below: Date Description Deposit of $5 00,000 ?om LINDBERG in North Carolina Growth and Prosperity Committee Account Deposit of $1,000,000 from LINDBERG in North Carolina Growth and Prosperity Committee Account Transfer of $10,000 from North Carolina State June 15, 2018 Political Party A to the campaign account Transfer of $1 0,000 from North Carolina State July 16, 2018 Political Party A to the campaign account Transfer of $230,000 from North Carolina State July 26, 2018 Political Party A to the campaign account June 11, 2018 June 11, 2018 Page 18 of 23 Case Document 3 Filed 03/18/19 Page 18 of 23 All in violation of Title 18, United States Code, Section 1349. COUNT TWO 18 U.S.C. 666(a)(2) and 2 (Bribery Concerning Programs Receiving Federal Funds and Aiding and Abetting) 85. Paragraphs 1 through 83 are realleged and incorporated herein by reference. 86. From in or about March 2018, through in or about August 2018, in Iredell County, in the Western District of North Carolina, and elsewhere, the defendants, (1) GREG E. LINDBERG, (2) JOHN D. GRAY, (3) JOHN v. PALERMO, and (4) ROBERT CANNON HAYES, did corruptly give, offer, and agree to give a thing of value to any person intending to in?uence and reward an agent of the NCDOI, a State agency that received bene?ts in excess of $10,000 pursuant to a Federal program involving a grant, contract, subsidy, loan guarantee, and other forms of Federal assistance in 2018, in connection with any business, transaction, or series of transactions of such State government and agency involving something Of value of $5,000 or more: namely, the defendants gave, offered, and. agreed to give $2 million in campaign contributions and through an independent expenditure committee to the SIONER, a public of?cial of the State of North Carolina, intending to in?uence and reward the in connection with the transfer of Senior Deputy Commissioner A. All in violation of Title 18, United States Code, Sections 666(a)(2) and 2. COUNT THREE 18 U.S.C. 1001(a)(2) (False Statements) 87. Paragraphs 1 through 83 are realleged and incorporated herein by reference. . Page 19 on3 Case Document 3 Filed 03/18/19 Page 19 of 23 88. On or about August 28, 2018, in the Western District of North Carolina, and elsewhere, the defendant, (4) ROBERT CANNON HAYES, knowingly and willfully, made a material false, ?ctitious, and fraudulent statement and representation in a matter within the jurisdiction of the executive branch of the government of the United States, to wit, a false statement to agents of the Federal Bureau of Investigation that North Carolina State Political Party A had not accepted directed contributions. This statement was false because, as Chairman of North Carolina State Political Party A, HAYES then and there knew that North Carolina State Political Party A had accepted directed contributions from LINDBERG. All in violation of Title 18, United States Code, Section 1001(a)(2). COUNT FOUR 18 U.S.C. 1001(a)(2) (False Statements) 89. Paragraphs 1 through 83 are realleged and incorporated herein by reference. 90. On or about August 28, 2018, in the Western District of North Carolina, and elsewhere, the defendant, (4) ROBERT CANNON HAYES, knowingly and willfully, made a material false, ?ctitious, and fraudulent statement and representation in a matter within the jurisdiction of the executive branch of the government of the United States, to wit, a false statement to agents of the Federal Bureau of Investigation that neither LINDBERG, nor anyone associated with LINDBERG, had any discussions with HAYES about expectations with respect to $500,000 contribution to North Carolina State Political Party A, or directed HAYES where $500,000 contribution would go. This was false because HAYES then and there knew that he had conversations with LINDBERG and GRAY during which LINDBERG and GRAY directed HAYES to transfer $250,000 to the campaign. Page 20 of 23 Case Document 3 Filed 03/18/19 Page 20 of 23 All in violation of Title 18, United States Code, Section 1001(a)(2). COUNT FIVE 18 U.S.C. 1001(a)(2) (False Statements) 91. Paragraphs 1 through 83 are realleged and incorporated herein by reference. 92. On or about August 28, 2018, in the Western District of North Carolina, and elsewhere, the defendant, (4) ROBERT CANNON HAYES, knowingly and willfully, made a material false, ?ctitious, and fraudulent statement and representation in a matter within the jurisdiction of the executive branch of the government of the United States, to wit, a false statement to agents of the Federal Bureau of Investigation that HAYES never spoke with the COMMISSIONER about LINDBERG or GRAY, or personnel or personnel problems at the NCDOI. This statement was false because HAYES then and there knew that he had spoken with the CONIMISSIONER about contributions from LINDBERG being funneled through North Carolina State Political Party A to the COMMISSIONER, and about request that the COMMISSIONER move certain personnel within the NCDOI. All in Violation of Title 18, United States Code, Section 1001(a)(2). NOTICE OF FORFEITURE AND FINDING 0F PROBABLE CAUSE 93. Notice is hereby given of 18 U.S.C. 982 and 28 U.S.C. 2461(0). Under Section 2461(0), criminal forfeiture is applicable to any offenses for which forfeiture is authorized by any other statute, including but not limited. to 18 U.S.C. 981 and all speci?ed unlawful activities listed or referenced in 18 U.S.C. 1956(0)(7), which are incorporated as to proceeds by Section The following property is subject to forfeiture in accordance with Section 982 and/or 2461(0): a. All property which constitutes or is derived from proceeds of the Violations set forth in this Bill of Indictment; and Page 21 of23 Case Document 3 Filed 03/18/19 Page 21 of 23 b. If, as set forth in 21 U.S.C. 853(p), any property described in cannot be located upon the exercise of due diligence, has been transferred or sold to, or deposited with, a third party, has been placed beyond the jurisdiction of the court, has been substantially diminished in value, or has been commingled with other property which cannot be divided Without dif?culty, all other property of the defendants to the extent of the value of the property described in 94. The Grand Jury ?nds probable cause to believe that the following property is subject to forfeiture on one or more of the grounds stated above: 0 a forfeiture money judgment in the amount of at least $2 million, such amount constituting the proceeds of the violations set forth in this Bill of Indictment; 0 approximately $250,000 in proceeds voluntarily turned over by the COMMISSIONER to the United States as a result of the investigation; Page 22 of23 i Case Document 3 Filed 03/18/19 Page 22 of 23 and approximately $1.5 million in proceeds deposited into two bank accounts held in the name of Norm Carolina Growth and Prosperity at Wells Fargo Bank, account numbers *0817 and '*0809. A TRUE BILL 156mm oN R. ANDREW MURRAY UNITED STATES ATTORNEY BILL STETZER FIRST ASSISTANT UNITED STATES ATTORNEY DANA O. WASHINGTON ASSISTANT UNITED STATES ATTORNEY ANNALOU T. TIROL ACTING CHIEF, PUBLIC IN (MTV, Page 23 of 23 Case Document 3 Filed 03/18/19 Page 23 of 23