Near North fined $1.4M for Segal's looting

BY MONIFA THOMAS, Staff Reporter
Chicago Sun-Times
December 14, 2005

The insurance firm that convicted executive Michael Segal swiped millions from for his personal use was fined $1.4 million Tuesday by a federal judge.

Segal was sentenced last month to 10 years in prison after a jury convicted him of racketeering, embezzlement and fraud for looting $35 million from a restricted account at his company, Near North Insurance Brokerage Inc. Segal was also ordered to forfeit $30 million, the largest forfeiture verdict ever handed down by a federal jury in Chicago.

The same jury convicted Near North on 21 criminal charges, seven of which were later thrown out by U.S. District Judge Ruben Castillo.

On Tuesday, Castillo ordered the company to pay $100,000 for each of its 14 convictions, much less than the $7 million fine the government requested.

The judge said even though Near North was dominated by Segal, company employees were at fault for allowing the politically connected mogul to run the firm as a criminal enterprise for several years.

Accountant Watkins portrayed as victim

"All it would have taken on the part of a lot of different employees . . . is a phone call to the right people to bring this all to a head," the judge said.

Segal and the company, which is in the process of being dissipated, are jointly responsible for paying more than $841,000 in restitution to the Chicago Transit Authority and other clients defrauded by Segal.

Also sentenced by Castillo on Tuesday was Segal's former accountant, Daniel Watkins.

Watkins, 61, of Grayslake, was ordered to pay more than $109,000 for funds embezzled from Near North for personal expenses. He was also sentenced to two years probation with six months of home confinement.

Castillo agreed with the government's portrayal of Watkins as a victim of Segal's control.

"I think you were used no differently than a big drug dealer uses someone to carry drugs for them," Castillo said.

The judge granted the government's request for a lighter sentence because Watkins cooperated with its investigation by wearing a wire for two months and offering to testify against his former boss. Castillo also allowed probation instead of jail time, so that Watkins could be with his wife, who has a medical condition.

"I am sorry for what I did," Watkins said. "I am sorry for the problems I caused for my family and others."

Watkins' attorney Susan Cox said her client attempted to atone for his crime by confessing to his church congregation and selling his home to pay restitution.

Copyright 2005, Digital Chicago Inc.

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