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Provider of Film Bonds Arrested

January 30, 2002|James Bates

A prominent Chicago insurance executive who launched one of Hollywood's main companies providing bonds that protect film financers when movies go seriously over budget or are late, has been charged with mail fraud and insurance fraud.

Michael Segal, president of Near North Insurance, was accused Monday in federal court in Chicago of embezzling millions of dollars in insurance premiums from a trust fund Illinois requires brokers to maintain, according to the Chicago Tribune. Segal's lawyer, Harvey Silets, called the charges specious.

Segal founded International Film Guarantors in 1991 as a joint venture with insurance giant Fireman's Fund.

Completion bond companies provide a safety net for lenders and financiers by guaranteeing that they will step in if a movie goes seriously over budget, is late or isn't delivered in the shape that was agreed to.

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James Bates

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