United States v. Michael Segal, 938 F.3d 898

Background

Michael Segal and his company Near North Insurance Brokerage (NNIB) were convicted of RICO-related fraud; Segal was ordered to forfeit $15 million and his interest in NNIB; the government restrained roughly $47 million in assets.
In 2013 Segal and the United States entered a court‑approved settlement stipulation: Segal relinquished claims to assets listed on Exhibit A (except Exhibit B assets released to him) in satisfaction of his forfeiture obligations.
Years later Segal moved to rescind or modify the 2013 settlement, arguing unconscionability, a government “windfall,” and Rule 32.2 defects; the district court denied relief and he appealed.
The Seventh Circuit treated Segal’s challenge as a civil contract dispute embedded in a criminal case, so his notice of appeal was timely under the civil 60‑day rule; the court nevertheless affirmed denial of rescission/modification.
Joy (ex‑wife) Segal previously filed a §1963(l) third‑party claim and settled in 2010, receiving about $7.7 million; her settlement disclaimed rights to remaining restrained property pending completion of forfeiture proceedings.
Joy Segal’s repeated attempts to intervene in the ongoing liquidation were denied as premature (her claimed interest is not yet ripe); the Seventh Circuit affirmed that denial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Timeliness / appellate jurisdiction for Michael Segal's appeal	Segal treated his motion as civil and filed within 60 days; appeal timely.	Government: criminal Rule 4(b) 14‑day deadline applies; notice was late.	Court: treat dispute as civil contract matter; 60‑day civil deadline applies; appeal timely.
Appealability while liquidation continues / nature of relief	Segal sought rescission/modification of settlement (injunctive relief); order is appealable.	Government: forfeiture is part of criminal sentence and may be criminal in nature.	Court: substance controls; order resolved civil dispute (contract/injunctive relief) and was appealable under §1292(a)(1).
Enforceability of 2013 settlement (procedural & substantive unconscionability; windfall)	Segal: agreement unconscionable; government obtained assets in excess of $15M; court failed to confirm nexus under Rule 32.2.	Government: settlement was negotiated by counsel, reflected asset commingling and risk of valuation; no $15M cap; Rule 32.2 duty inapplicable to settlement; Segal previously enforced the same agreement.	Court: affirmed district court—settlement is neither procedurally nor substantively unconscionable; no $15M cap; judicial estoppel bars inconsistent attack; Rule 32.2 not triggered here.
Joy Segal's right to intervene now	Joy: entitled to intervene and seek accounting/return of assets allegedly collected as substitutes for Michael’s forfeiture.	Government: Joy’s 2010 settlement disclaimed claims to restrained/forfeited property until completion of forfeiture proceedings; no ripe interest.	Court: Joy lacks a cognizable present interest; intervention denied (as‑of‑right and permissive); claim not ripe.

Key Cases Cited

United States v. Segal, 495 F.3d 826 (7th Cir. 2007) (affirming convictions and aspects of sentence)
United States v. Segal, 644 F.3d 364 (7th Cir. 2011) (addressing sentencing and forfeiture issues)
United States v. Segal, 811 F.3d 257 (7th Cir. 2016) (resolving disputes under the settlement regarding specific assets)
Libretti v. United States, 516 U.S. 29 (1995) (forfeiture can be punishment and part of criminal sentence)
United States v. Bownes, 405 F.3d 634 (7th Cir. 2005) (contractual risk of changed valuations enforces settlements)
Betts v. United States, 10 F.3d 1278 (7th Cir. 1993) (pragmatic civil/criminal characterization for appeal deadlines)
Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785 (7th Cir. 2013) (judicial estoppel prevents inconsistent positions)
United States v. Rand Motors, 305 F.3d 770 (7th Cir. 2002) (contract interpretation principles applied to settlement agreements)