Michael Segal, CEO of Chicago-based Near North Insurance Brokerage Inc., resigned his position after being charged with mail and insurance fraud involving a trust fund from which he allegedly misappropriated funds. According to the Chicago Tribune, Segal was arrested on Jan 26 and charged in a Chicago federal court. The formal complaint alleges that Segal diverted monies that were intended for the payment of customer premiums. The account from which these funds were allegedly diverted is reported to have been short approximately $22 million as of Sept. 30. It is further alleged that Segal tried to cover up the deficit and that the money was used for personal expenses and general operating expenses. Near North is a privately-held company that provides property, life, health and workers’ compensation coverages. Segal was arrested at a hotel near the company’s offices prior to leaving for London on a routine business trip. He was released later that day on a $750,000 bond. The preliminary hearing date is set for Feb. 15. If convicted, Segal could face up to 25 years in prison for insurance and mail fraud, along with a $250,00 fine for each count. Countering the charges, Segal’s lawyer, Harvey Silets, cited an accounting error as the cause of the discrepancy. The Tribune reported that John Harney, a senior vice president, was appointed chief operating officer of Near North.
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