Federal prosecutors in Chicago have expanded their original indictment of Michael Segal, founder and CEO of Near North Insurance Brokerage Inc., charging him with looting the company of more than $20 million over a 12-year period.
Segal was originally arrested last January on similar charges, and authorities have been investigating his financial activities more deeply ever since. He resigned his position as head of Near North following the indictment.
According to the Chicago Tribune, the new charges include 15 counts of insurance, mail and wire fraud and one count of criminal racketeering. Prosecutors alleged that Segal systematically misappropriated funds from Near North’s accounts, and estimated that during the period 1990-2002 he wrongfully made use of more than $20 million.
The complaint seeks to recover that amount as well as Segal’s interest in Near North. His personal residence in Highland Park also risks being forfeited if he’s convicted on the racketeering charge. Prosecutors have indicated that Segal used the funds not only for himself, but to provide loans, discounts and rebates to favored customers, as well as for political contributions.
Segal has consistently maintained that he is innocent of the charges, and is looking forward to being vindicated in court.
He’s specifically alleged to have misused Near North’s trust fund by concealing credits and refunds due to the firm’s clients. Prosecutors indicated that he was able to continue these practices for as long as he did by threatening retaliatory lawsuits against employees who questioned his activities. A number of former employees have cooperated with authorities in the investigation.
Near North took immediate steps to distance the company from Segal’s activities. Fred Foreman, a former U.S. Attorney for the Northern District of Illinois and currently a partner at Freeborn and Peters, where he leads the firm’s practice group specializing in government relations and, regulatory and compliance issues, was elected to Near North’s Board of Directors in February, and serves as its Chairman.
“It is the boards goal to make sure that Near North is fully compliant with all regulatory requirements. I am pleased that in spite of these trying times our employees continue to service clients with the utmost professionalism,” Foreman stated in a company announcement issued following the new indictments.
The bulletin stressed that “In the last twelve months Near North has fully cooperated with carriers and customers giving them access to accounting records and allowing them to audit and verify finances. To Near North’s knowledge, no client complaints have been made to the Illinois Department of Insurance relating to the company’s premium fund trust account, and no client or carrier has been harmed in any way.”
The broker voluntarily submitted its trust fund accounts for auditing to the Illinois Insurance Department in August 2001.
Topics Illinois
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