According to Randall Samborn, a spokesman for the Northern District of Illinois U.S. Attorney's Office, in addition to the prison term, the court upheld a $30 million judgment against Mr. Segal and ordered restitution of over $800,000.

He will be transferred to a federal minimum security prison at either Yunkton, S.D., or Oxford, Wis., to serve out his term, Mr. Samborn said. Mr. Segal, 63, will receive credit for time served, he added.

The defense will have 10 days to file for an appeal, said Mr. Samborn, but this will not prevent Mr. Segal's transfer.

Mr. Segal was convicted of 26 counts stemming from the embezzlement. The counts include three of embezzlement, 13 counts of mail fraud, seven counts of making false statements, one count of wire fraud, one for tax fraud conspiracy, and one count for racketeering.

Judge Castillo after the conviction threw out seven counts of making false statements, but upheld the remaining 19 convictions for fraud, racketeering, embezzlement and tax conspiracy.

According to the prosecution's case, Near North gave illegal discounts on insurance premiums to well-heeled Chicago politicians and other high profile individuals. Mr. Segal was accused of using some of the funds for personal use.

Mr. Segal's defense was that the fault did not lie with misconduct on his part but poor accounting practices on the part of Near North.

The company, the defense argued, was in the process of straightening out its accounting mess. It also blamed conversion to a new computer system for the accounting errors. The firm noted that no individuals lost insurance and no premiums went unpaid due to the accounting errors.

Near North alerted the Illinois Department of Insurance to the situation in 2001. Mr. Segal was arrested in January of 2002 by the FBI shortly after the firm made the situation known to the department.