Prosecutors Rest Case in Segal Trial

Prosecutors ended their fraud and racketeering case against Michael Segal after nearly six weeks of testimony with an accountant who said he warned the Chicago insurance broker that his Near North Insurance Brokerage Inc.’s premium trust fund carried a deficit.

But on cross-examination in Segal’s racketeering and fraud trial Wednesday Charles Caufield admitted he lied to the FBI three weeks ago when he denied the trust fund was ever out of balance.

Segal is on trial on federal charges that he looted more than $20 million from a Near North premium trust fund, which by law must be kept in reserve. Prosecutors say he used some of the money to expand his business empire and some to pay personal expenses.

Attorneys for Segal and Near North insist no customers lost money or went without insurance coverage. They maintain that accounting was a mess at Near North and that company accountant Daniel Watkins was to blame for any illegalities. Watkins pleaded guilty in March to stealing more than $70,000 from Near North.

Later on Wednesday, former personal assistant Denise Mayo testified for the defense that Segal did not sign a memo approving regular cash payments from company accounts.

The memo from Watkins sought Segal’s approval to record regular cash payouts allegedly given to Segal on company books as postage expenses. Mayo testified Segal sometimes had her sign or initial documents for him.

Deloitte & Touche accountant Thomas Jackson opened up the defense Wednesday by denying he had been thrown out of a 1996 meeting when he raised the deficit in the trust fund, contradicting previous testimony by former Near North executive Steven Coleman.

After a brief defense from Segal’s defense team—which did not include testimony from Segal—jurors were given a two-week break before the trial resumes with closing arguments on June 10.

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