Jury Recommends Segal Forfeit $30 Million, 60% Stake in Near North

The jury that convicted Chicago insurance broker Michael Segal of racketeering and fraud has recommended that he be ordered to forfeit $30 million and 60 percent of his interest in Near North Insurance Brokerage Inc.

Segal, 61, was taken into custody immediately after the verdict because the judge considered him a flight risk.

Segal, whose trial drew widespread attention in part for his strong political connections, was found guilty Monday of all 26 counts against him, the most serious alleging that he looted a premium trust account that his company was required by law to maintain.

Prosecutors said Segal could get 20 years in prison when he is sentenced, but the amount of time depends on U.S. District Judge Ruben Castillo’s interpretation of federal sentencing guidelines.

Assistant U.S. Attorney William Hogan said it could be months before a sentencing date is set.

Segal spokeswoman Kitty Kurth said it is “very likely” that Segal will appeal his conviction. Defense attorneys declined comment after court.

During the two-month trial, prosecutors contended that Segal looted a restricted account at Near North Insurance of more than $20 million to finance a lavish lifestyle and grow his business and that he also took hundreds of thousands of dollars from his company’s petty cash for his own use.

The defense said that Segal was actually a victim of shoddy accounting practices and scheming underlings who tried to wrest control of the company and then went to the FBI to try to destroy it when they failed.

The jury took about nine hours to convict Segal of 13 counts of mail fraud, one of wire fraud, seven of making false statements, three of embezzlement, one of tax conspiracy and one of racketeering. The insurance brokerage also was convicted of all charges: 11 counts of mail fraud, seven of making false statements and three of embezzlement.

Prosecutor Dean Polales said that although Segal was able to borrow money to pay back the trust fund before clients lost money, that “does not diminish the gravity of the crime.”

“We didn’t have to wait for a collapse in this case to see what was going on,” Polales said after court Tuesday. “We hope we send a message to all others who have a great deal of control over massive amounts of money that they should take their trust seriously.”

Prosecutors had asked the jury to order Segal to forfeit $35 million to pay back money he made as a result of racketeering. Polales said Castillo will determine the assets Segal must give back to the government and how they will be are distributed.

Randall Samborn, spokesman for the U.S. attorney, said the verdict was the largest forfeiture judgment by a federal jury in Chicago.

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Topics USA Fraud