From the Chicago Sun-Times

Insurance exec sought Ryan's aid, feds say
February 27, 2004
BY STEVE WARMBIR Federal Courts Reporter
Michael Segal, his Near North Insurance business empire hanging in the
balance, reached out to Gov. George Ryan to pressure the state's chief
insurance regulator to back off taking Segal to the woodshed, federal
prosecutors alleged Thursday in the latest wave of charges against Segal.
Prosecutors hit Segal with another indictment, adding mail fraud and other
charges, including a tax fraud conspiracy count, saying Segal evaded
personal income taxes from 1978 to 2001. His firm, Near North, and a
former employee also are charged in the latest indictment.
Segal is accused of raiding a key company account of millions of dollars
to pay for personal and business expenses as well as make payments to
prominent politicians, including Ald. Burton Natarus (42nd), who has denied getting
a loan or gift from Segal. In effect, Segal used a company account as his
piggy bank, the feds say. In the latest charges against him, Segal allegedly tried to "apply
improper political pressure" by having then-Gov. Ryan contact state insurance
director Nat Shapo to ensure there would be "no regulatory action
detrimental" to Near North Insurance. The indictment does not specify when
Ryan's alleged request took place nor how persuasive he was. Shapo is
believed to be cooperating with the feds and brought the matter to their
attention. Illinois has taken no action against Segal's or Near North's license
although some Near North employees did face discipline while Ryan was
governor. After Segal's arrest in early 2002, which garnered wide publicity inside
and outside the insurance industry, the lack of action by the state was a key
to the continuing survival of Segal's business. It bolstered the confidence
of insurance companies and clients of the firm while Near North faced serious
allegations. Segal was short millions of dollars in a key company account that
shouldn't have been touched, authorities allege. Segal has contended that his firm
reported the problem to state regulators and has blamed possible
accounting problems on any shortfall.
A Segal spokesman called the latest indictment "mostly a rehash of old
allegations." Both Segal, Near North and the former Near North employee,
Daniel Watkins, have been charged before. Watkins is cooperating with
prosecutors and secretly recorded an extensive number of conversations
with Segal for the feds.
"With respect to the new allegations in regard to the office of the
governorof the State of Illinois, Michael Segal has never applied any improper
political pressure to any government official," according to a statement
released by a Segal spokesman.
Segal has long had ties to Ryan, who is under indictment for corruption
charges himself. Segal and his firm have given thousands of dollars in contributions to
Ryan over the years, both when Ryan was secretary of state and later as
governor. Ryan's son, George Ryan Jr., once worked with Segal setting up insurance
deals. And Segal let the governor use Near North's private jet at least one time,
when Ryan joined two of his close friends at the time on a Near North
plane ride.
Those friends were Larry Warner, who is facing influence peddling charges,
and Donald Udstuen, who has pleaded guilty to his own set of corruption
charges and is cooperating with the federal government.