Forfeiture Settlement Intervention

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7^th Circuit Court of Appeals

Case Name: United States of America v. Michael Segal

Case No.: 17-2842; 17-3317

Officials: RIPPLE, HAMILTON, and ST. EVE, Circuit Judges.

Focus: Forfeiture Settlement Intervention

These two appeals present straightforward issues of contract law, but with some procedural complications. Appellant Michael Segal was convicted in 2004 of racketeering, mail and wire fraud, making false statements, embezzlement, and conspiring to interfere with operations of the Internal Revenue Service. The company he owned, Near North Insurance Brokerage (NNIB), was convicted of mail fraud, making false statements, and embezzlement. The history of Mr. Segal’s prosecution is detailed in United States v. Segal, 495 F.3d 826 (7th Cir. 2007) (affirming convictions and all aspects of sentence except forfeiture order); United States v. Segal, 644 F.3d 364 (7th Cir. 2011) (affirming in part and remanding for discretionary re-sentencing); and United States v. Segal, 811 F.3d 257 (7th Cir. 2016) (addressing several issues under settlement of forfeiture obligations).

After Mr. Segal served time in prison, see 811 F.3d at 259, and after further sentencing proceedings, see 644 F.3d at 366– 68, he was ordered to forfeit to the government $15 million and his entire interest in NNIB. The company itself was ordered to pay restitution and a fine. 495 F.3d at 830. The government initially restrained approximately $47 million worth of assets of both Segal and NNIB. Liquidation proceedings have continued well into the case’s second decade.

Mr. Segal’s forfeiture obligations have been disputed for years. See, e.g., 811 F.3d 257. In early 2013, on the eve of what promised to be a complex and contentious hearing over which assets should be forfeited and how much they were worth, Mr. Segal and the government agreed on a court-approved settlement that fulfilled Mr. Segal’s $15 million personal forfeiture obligation. Mr. Segal now seeks to rescind or modify that agreement. The district court denied his attempt, and he now appeals. The 2013 settlement, which Mr. Segal has succeeded in enforcing strictly against the government, see id. at 261–62, is the first of the two contracts we address here.

The second contract is a related settlement between Mr. Segal’s ex-wife, Joy Segal, and the United States government. The Segals divorced in June 2005, after Mr. Segal’s conviction. In February 2006, Ms. Segal filed a third-party claim under 18 U.S.C. § 1963(l) to intervene in Mr. Segal’s forfeiture proceedings. In November 2010, Ms. Segal, too, settled her claims with the government. Under that deal, the government released to her about $7.7 million in restrained assets. In exchange, she relinquished all further claims—save one contingent future interest, at issue here. She now seeks to intervene in the ongoing liquidation proceedings that the district court is administering pursuant to Mr. Segal’s forfeiture settlement. The district court denied her attempt at intervention because her contingent future interest is not yet ripe. She also appeals.

We have jurisdiction over both appeals, and we affirm in all respects the district court’s challenged orders.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.