Authorities continuing investigation into Near North.

By The Associated Press
Posted on Friday, February 15, 2002

CHICAGO -- A politically connected Chicago insurance executive was indicted Thursday in connection with an alleged scheme to conceal the status of an insurance premium trust fund account that was deficient by millions of dollars.

A federal grand jury returned an indictment against Michael Segal, charging him with insurance fraud for allegedly filing a false document with the Illinois Department of Insurance, according to a statement released by U.S. Attorney Patrick Fitzgerald's office.

Segal, 59, is accused of falsely declaring "that he properly maintained premiums in a premium fund trust account" when he knew that he had not done so as required by state law, the statement said. If convicted, he faces as much as 10 years in prison and a fine of $250,000.

The charge stems from Segal's alleged actions as head of Near North National Insurance Brokerage Inc. He resigned from the firm last month, days after his arrest on suspicion of embezzling and misappropriating $20 million in premiums.

In a criminal complaint, prosecutors claim Segal directed Near North to use insurance premium money that should have been kept in a trust fund account to pay for personal expenses, business acquisition and expansion, and operating costs. The fund was $20 million deficient by September, according to the complaint.

The government also accused Segal of having his company mail customers only debit notices and not credit statements -- keeping the difference.

Segal has denied the allegations and attributed them to an accounting error.

Randall Samborn, a spokesman for Fitzgerald, said authorities were continuing an investigation but would not discuss whether the government planned to file additional charges.

As an insurer to the state's Department of Revenue and the Illinois Toll Highway Authority, Segal's firm held at least 20 state government contracts.

The Times

-- Anonymous, February 18, 2002