According to the Chicago Tribune, Michael Segal, CEO of Near North Insurance Brokerage, was arrested on Jan 26 and charged with insurance and mail fraud in a Chicago federal court.
The formal complaint alleges that Segal diverted monies from a trust fund that was intended for the payment of customer premiums. The account from which these funds were allegedly diverted is reported to have been short approximately $22 million as of Sept. 30. It is further alleged that Segal tried to cover up the deficit and that the money was used for personal expenses and general operating expenses.
Near North, a provider of property, life, health and workers’ compensation coverages, is a privately-held company with sales reportedly exceeding $100 million annually. Among its clients are several high-profile trade associations in the Washington, D.C. area.
Segal, 59, was arrested at a hotel near the Near North offices prior to leaving for London on a routine business trip. He was released later that day on a $750,000 bond, and the date for a prelimnary hearing was set for Feb. 15.
FBI agents also raided Segal’s two residences, one in Highland Park as well as the downtown Chicago offices of Near North and a storage facility for the firm.
If convicted, Segal could face up to 25 years in prison for insurance and mail fraud, along with a $250,00 fine for each count.
Segal’s lawyer, Harvey Silets, countered the charges, maintaining an accounting error as the cause of the discrepancy.
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