From Pinstripes to Prison Stripes: Near North’s Segal on Life Behind Bars

January 1, 2006

Former Chicago Insurance Broker Serving Time for Fraud Appears on TV; Is Movie Next?

Once you get over the fear…you find that people are just people,” Michael “Mickey” Segal, 63, told an ABC-TV news anchor regarding concerns about other prison inmates in his new home at a South Dakota minimum security prison, Yankton. The interview from his jail cell was the first Segal has given since his conviction for siphoning money from his successful Chicago insurance firm, Near North Brokerage. Segal added that he looks forward to the opportunity to help a lot of his prison inmates, “many who are young and already look up to me.”

In handing down a 10-year sentence, U.S. District Judge Ruben Castillo had another view. Castillo said that Segal had two sides, one was very charming and nice, but that there was evidence that Segal had a side that was “mean-spirited, immoral and unethical.”

“You just think you’re above the law. Well, guess what, no one is untouchable, especially in this town,” Castillo told Segal at the sentencing, according to the Chicago Tribune story.

Convicted in June

Segal was convicted in June 2004 of 26 counts of racketeering, fraud, embezzlement and other charges. The brokerage firm was also convicted of 11 counts of mail fraud, seven of making false statements and three of embezzlement.

The court ordered the insurance tycoon to forfeit $30 million-the largest forfeiture verdict ever handed down by a federal jury in Chicago. His sentence of 10 years in prison was lighter than expected since he could have received up to 25 years. News accounts from Associated Press and Reuters said that about one and a half years of the time he spent in prison awaiting trial and sentencing would be credited toward the 10 year sentence. Segal was moved to the Metropolitan Correctional Center in Chicago the day after his conviction and to Yankton after the sentencing earlier this month.

The ‘little people’

Defense attorneys during the trial said that Segal was actually the victim of devious and dishonest underlings and bad accounting. Attorneys for Segal during the trial repeatedly argued that no Near North Brokerage customer ever lost a dime. However, during the sentencing, Judge Castillo said that the actual out-of-pocket loss to customers came to $1.15 million with $300,000 of that sum stolen from the Chicago Transit Authority by Segal when he allowed one of his companies to take an improper commission. .

During the recent ABC-TV interview, Segal reiterated that theme that “he never stole a dime.”

“I was painted as being on the dark side, the bad guy, but I have done more for little people than anyone,” Segal said. Segal is a known charitable contributor, having made donations to the Moody Bible Institute, housing for seniors and a battered women’s shelter, all in Chicago.

During the interview he added that people in “very high places” call him at Yankton “literally crying about what has happened to me.” Former Illinois Gov. George Ryan was said to have pressured a state regulator during the trial to go to bat on Segal’s behalf and had called the state insurance department saying that he hoped that everything would be “okay” for Segal. In the television interview Segal declined to say who the people calling him in “very high places” are.

Attention deficit disorder

During the trial it was learned that Segal has Attention Deficit Hyperactivity Disorder or ADHD and has been on medication for the medical condition for over 20 years. Some sources say he has been unable to have the medicine while awaiting trial.

During his television interview Segal also talked about being ADHD. “Most people with ADHD are entrepreneurial,” Segal said. He maintained that a downside of having ADHD is that one is less likely to pay attention to details, referring to his lack of overseeing accounting issues that lead to his demise.

According to accounts of the trial, Segal raided a trust fund account that insurance brokers keep to safeguard policyholders’ money. While not declaring it, Segal used the money on business ventures and a lavish lifestyle for himself and his family. Customer funds were used for everything from a Gold Coast condominium to therapy sessions, opera tickets and for gifts from the well-known, high end jeweler, Tiffany’s.

Repeatedly warned

During his trial prosecutors said Segal was repeatedly warned that he was using the trust fund illegally. They said that Segal purposely did not clean up financial and accounting records in order to cover his illegal activities. In fact Segal’s accountant, Daniel Watkins, was an embezzler who had made a mess of the records and pleaded guilty in March 2004 to stealing more than $70,000 from Near North Brokerage.

Family members and friends continue to rally around Segal. During the television interview Segal said his daughter visits at least three times a week. He is said to be remorseful while still believing he never stole anything from his policyholders. “The mean-spirited people are the ones who did this to me,” Segal concluded.

ABC-TV said there is a chance that Segal’s saga may be made into a book that will eventually become a movie.

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