Near North Head Resigns After Arrest
By Mark E. Ruquet
NU Online News Service, Feb. 4, 11:21 a.m.?The chief executive officer of Chicago-based Near North Insurance Brokerage Inc., who is facing criminal charges, has resigned, his company said.
Near North National Group, the parent company of the brokerage, announced Michael Segal' s resignation after his indictment for embezzling $20 million from the firm.
John Harney, a senior vice president, has been named interim chief operating officer. Near North also announced that a new, independent board of directors will be named shortly.
The FBI arrested Mr. Segal on Jan. 26 at a hotel near the firm's offices, the U.S. Attorney's Office for the Northern District of Illinois said in a statement. He was released on $750,000 bail that same day. A preliminary hearing is scheduled for Feb. 15.
According to a company statement, the investigation began over the summer after Neare North officials reported accounting irregularities in the firm's premium fund trust account to the Illinois Department of Insurance. During the investigation, several former employees claimed Mr. Segal misappropriated funds, which lead to his arrest, the company said.
The U.S. Attorney's Office said Mr. Segal is alleged to have misapplied funds for personal expenses and other items.
He is also accused of a mail fraud scheme to mail debit notices to customers and to have either destroyed or not mailed credit statements to "conceal the existence of credit balances from customers." The balances were then allegedly used by Mr. Segal and the firm.
Mr. Segal has denied the charges.
If convicted, Mr. Segal could face up to 25 years in prison and $500,000 in fines.
Near North has not been charged with any wrongdoing and is cooperating with authorities, the firm said. Near North also stressed that no customer, carrier or client has lost any money and no complaints have been filed against the firm.
Near North National Group provides insurance brokerage, risk management, technology and financial products and services to commercial and personal line clients. The firm is heavily involved in securing surety bonds for the film making industry.
Near North supplies insurance and consulting services for several Illinois State and Chicago agencies. Mr. Segal has been described in press accounts as "politically connected" and a supporter of current Illinois Attorney General Jim Ryan who is running for governor in the state's Republican primary.
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