In recent court filings, federal prosecutors have detailed how former Near North Insurance Brokerage owner Michael Segal spent the premium funds they say he misappropriated. Meanwhile, one of Segal’s former accountants and a co-defendant, has pleaded guilty to helping his old boss disguise the $20 million-plus embezzlement over 10 years.
Prosecutors alleged that the Chicago-based Segal, reputed to be a politically-connected figure, used the funds he stole from his firm’s legally required Premium Fund Trust Account to help expand Near North, hire expensive prostitutes and pay for other personal expenses.
They also charged that Segal used his political influence to get former Illinois Gov. George H. Ryan, who is facing corruption charges brought by the Chicago U.S. attorney’s office, to persuade former Illinois Insurance Director Nathaniel Shapo to not pursue any actions related to Near North’s Premium Fund Trust deficit.
Shapo has denied the charge, and a Segal spokeswoman told the Chicago Tribune that the recent court filings were an attempt to sensationalize the case and obscure the government’s lack of evidence of wrongdoing.
The government scored another victory, however, as it announced that former Segal accountant Daniel E. Watkins had pleaded guilty to one count of misappropriating funds from a person of business in insurance. He could face nearly two years in prison, but his sentencing was postponed until Segal’s case is completed.
It is widely believed that Watkins will cooperate with the government in its case in exchange for a lighter sentence. Watkins, 59, admitted to withdrawing money on Segal’s behalf and recording the transactions as postal expenses. He also admitted to taking between $70,000 and $120,000 for his own use.
Segal’s trial begins April 19. He has plead not guilty to all charges and claims the government is pursuing him in an attempt to bring down politically powerful figures he is believed to be close to.
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