Segal Attempted Runaround, Says Ex-Insurance Director

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AP Wire Service

Michael Segal tried to influence a state regulator by having then-Gov. George Ryan call him about problems at Near North Insurance Brokerage Inc., according to federal court testimony.

Nathaniel Shapo, former director of the Illinois Department of Insurance, testified Tuesday in Segal’s racketeering and fraud trial that he told a Segal attorney in 2001 he didn’t appreciate “improper political pressure” from the governor and Segal.

Shapo said he talked with Ryan in the summer of 2001 about a variety of topics, including a scheduled meeting between himself and Segal attorney Zach Stamp, a Ryan friend. Shapo said he didn’t know the meeting with Stamp concerned a problem with Near North until he spoke with Ryan.

“I think he said he hoped the meeting went well,” Shapo said of Ryan. Moments later, Shapo testified, “I think I inferred that, but I’m not sure if he said that.”

In a meeting on Aug. 24, 2001, Stamp said Near North was violating state insurance regulations and that its premium trust fund was in deficit, Shapo testified.

The government contends that Segal looted more than $20 million from the premium trust fund, which by law must be kept in reserve.

Attorneys for Segal and Near North insist no customers lost money or went without insurance coverage.

Stamp said at the meeting that a new employee had discovered a deficit in its premium fund. Shapo said his notes from the meeting indicated that Stamp estimated the deficit at $10 million to $15 million.

Shapo said he was “annoyed” that Ryan had called him about Near North and relayed that to Stamp at the meeting.

Shapo said he first met Segal in 1999 at a restaurant. Ryan’s son, George “Homer” Ryan Jr., worked in insurance with Segal and introduced them.

Prosecutors have alleged that Ryan made a second call to Shapo after the meeting with Stamp. Shapo’s testimony is scheduled to continue Wednesday.

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