CHICAGO (Legal Newsline) - The scariest thing about the book, Conviction at Any Cost, which reads like a top crime novel, is that it’s not a work of fiction. It’s Pulitzer Prize-winning writer Maurice Possley’s recounting of the victimization of Michael Segal, former head of one of the nation’s largest insurance brokerage firms, Near North National Group, Inc. out of Chicago, by a Department of Justice that turned its back on the rule of law’s most sacred principles - fairness and balance.
The book, based on thousands of hours of research, tells why and how Segal was targeted by federal prosecutors, who, as Possley said, elevated possible violations of a state insurance statute, under which there are no penalties if no losses, to federal charges on which they won a conviction, and a long prison sentence for Segal.
“It’s a story about how Michael Segal went from running one of the largest insurance brokerage firms in the nation to prison,” Possley, a former investigative reporter with Chicago Tribune, told the Cook County Record. “But it’s also a story of government overreach.”
Scales of Justice
The charges centered around $30 million allegedly taken from the firm’s premium fund trust account via a bogus postage stamp account.
Discrepancies in the fund stemmed from innocent computer software and accounting errors, Segal’s defense argued. And, his attorneys said, those errors became part of a scheme concocted by Near North executives plotting to win control of the firm. Segal retaliated against the executives, and they in turn sicced the FBI on him.
The FBI threatened Segal with arrest and demanded that he wear a wire to squeal on his high-level connections in Chicago politics and business. He refused and instead became the primary target of a prosecutor whose career needed a boost from a high-profile conviction.
“It’s a common technique used by the FBI,” Possley said. “Get you in a room, threaten you with arrest, and then ask you to wear a wire. Most of the time it’s a good technique for catching bad guys. But there are also cases where the prosecutor has a political or personal agenda that’s driving the prosecution.”
In June 2004, Segal was convicted of charges of fraud, racketeering and mishandling the premium trust funds. He was sentenced to 10 years and served eight. His firm, valued at $250 million, was ripped apart and nearly one thousand employees lost their jobs.
Yet a forensic audit of the firm’s books revealed no unexplained losses of funds, and no customers claimed they had been defrauded or denied payment. In addition, none of the insurance companies who dealt with Segal claimed that his company failed to make on-time payments for policies issued.
Possley said that the Segal story is straight out of Three Felonies a Day, a 2009 book by Harvey Silverglate, that posits that the average American professional unknowingly violates federal laws every day.
“There are so many statutes on the books that almost anything today can be construed as a federal crime,” he said.
To inject balance back into the justice system, Possley said, we should stop shielding prosecutors from civil liability actions.
“Other lawyers, doctors can be sued for misconduct and incompetence,” he said. “There’s no reason prosecutors should get protection. Now the worst that happens when misconduct occurs is that a case is sometimes overturned.”
Segal said that his legal fees over 15 years, including forfeitures proceedings, exceeded $3.6 million. In addition, forensic accounting fees in the case added up to $3.8 million.