Near North Insurance Brokerage chairman-CEO Michael Segal was charged Monday with insurance and mail fraud in connection with the embezzlement of more than $20 million from the firm.
Near North is a sister company to Los Angeles-based Intl. Film Guarantors, the largest completion bond company in the independent motion picture, studio and distribution industry. IFG is a limited partnership between Near North National Group and the Fireman’s Fund Insurance Co.
Segal, a major power broker in Chicago’s political machine, was arrested Saturday on federal charges of willfully embezzling and misappropriating premiums from Near North clients. There was no indication, however, that the Segal charges were related to entertainment clients. He was released later that day on a $750,000 unsecured signature bond.
Chicago-based Near North recently secured production coverage for “America’s Sweethearts,” “The Score” and “Lara Croft: Tomb Raider,” while IFG bonded such films as “Gosford Park,” “Rat Race,” “The Score” and “The Curse of the Jade Scorpion.”
The Near North roster of entertainment clients also includes Spyglass Entertainment, Revolution Studios, the Atlanta Braves, E! Entertainment Television, Major League Baseball and Trump Hotels & Casino Resorts.
A statement made available on the Near North Web site, nnng.com, outlined the situation as follows: “Last summer, Michael Segal and Near North voluntarily disclosed to the Illinois Dept. of Insurance that certain accounting errors resulted in an imbalance in the firm’s premium fund trust account. With input from the department, we made changes to our accounting systems and corrected the imbalances without any impact — financial or otherwise — on clients or carriers. … It came as a shock to learn that several former Near North employees now claim that Mr. Segal misappropriated funds and that those claims have led federal authorities to file charges against him personally. Mr. Segal vehemently denies any wrongdoing and intends to use all the tools the legal system provides to mount a vigorous defense. It is important to note that Near North has not been charged with any wrongdoing and its business dealings are in full compliance with the law.”
Media calls were forwarded to Near North senior VP John Harney, who was unavailable late Tuesday.