United States v. Segal, No. 17-2842 (7th Cir. 2019)Annotate this Case
Segal was convicted in 2004 of racketeering, mail and wire fraud, making false statements, embezzlement, and conspiring to interfere with operations of the IRS. His company, NNIB, was convicted of mail fraud, making false statements, and embezzlement. Segal and his wife, Joy, divorced after his conviction. After Segal served prison time, he was ordered to forfeit $15 million and his interest in NNIB. NNIB was ordered to pay restitution and a fine. The government initially restrained $47 million worth of assets of Segal and NNIB. Joy intervened and settled her claims with the government, which released to her about $7.7 million in restrained assets. Joy relinquished all further claims—save one contingent future interest. Liquidation proceedings continue. Segal and the government agreed on a court-approved settlement that fulfilled Segal’s $15 million personal forfeiture obligation. Segal later sought to rescind or modify that agreement. The district court denied his attempt and denied Joy’s attempt to intervene in the liquidation proceedings because her contingent future interest is not yet ripe. The Seventh Circuit affirmed. The court rejected Michael’s unconscionability argument, noting that he previously won strict enforcement of the settlement agreement, preserving his right to repurchase an interest in the Chicago Bulls. He is judicially estopped from pursuing this challenge. The court also rejected a “windfall” argument and, noting the number of appeals, stated that if there are further proceedings, the parties and their counsel will be subject to Rule 11.