US: Conrad Black Found Guilty in Fraud Trial
Conrad M. Black, the gregarious press tycoon also known as Lord Black of Crossharbour, was found guilty today by a Chicago jury of three counts of mail fraud and one count of obstruction of justice. Mr. Black was cleared of nine other counts against him, including racketeering. He is expected to appeal and the judge presiding over the case, Amy J. St. Eve, is expected to allow him to remain free on bail during that process. He could face up to 35 years in prison.
Three former associates were each found guilty of three counts of mail fraud.
The verdict came nearly four months after Mr. Black and the three associates went on trial together after being charged in 2005 with looting Hollinger International Inc., the Chicago-based company Mr. Black led, of more than $80 million. At the trial, the amount was reduced to $60 million.
Through Hollinger International, Mr. Black once commanded a far-flung media empire that included The Daily Telegraph, The Jerusalem Post and The Chicago Sun-Times, as well as scores of local community papers.
At the conclusion of the trial, the jury was asked to rule on numerous counts of mail and wire fraud, tax fraud, obstruction of justice and racketeering against Mr. Black. Also charged with various counts of mail and tax fraud were Hollinger's former chief financial officer, John A. Boultbee; a former vice president, Peter Y. Atkinson; and a former Hollinger lawyer, Mark S. Kipnis.
F. David Radler, who was Mr. Black's business partner for more than 30 years, pleaded guilty to a single fraud charge and was a key witness for the government, though prosecutors tried to play down his prominence in the case during their closing arguments. If the court were to approve his deal with prosecutors, Mr. Radler could spend as little as six months in a Canadian prison. Separately, he agreed to pay close to $100 million to settle various civil and Securities and Exchange Commission actions stemming from the fraud.
The S.E.C. case grew out of an internal investigation at Hollinger that ousted Mr. Black and Mr. Radler as the top executives in 2003 and spawned the criminal investigation.
In addition to his potential incarceration, Mr. Black also faces more than $1 billion in civil litigation from former shareholders of Hollinger International, the company itself and the S.E.C.
At the heart of the case were so-called noncompete payments, in which Mr. Black, Mr. Radler and the others were accused of lining their pockets with nearly $60 million to in effect not compete with themselves in markets where papers were being bought or sold. The transactions in question took place between 1998 and 2001, when, under financial pressure, Hollinger International decided to sell most of its newspaper holdings including its United States community newspapers and the largest chain of daily newspapers in Canada and The National Post, a paper Mr. Black had founded in 1998.
The money, according to the government, rightfully belonged to the shareholders of Hollinger and amounted to illegal bonuses. Separate charges against Mr. Black alone accused of him of improperly using company coffers to subsidize his lavish lifestyle. Days of testimony dissected his purchase of an apartment on Park Avenue in New York from the company, a trip on the company's Gulfstream jet to Bora Bora for vacation and a birthday party he threw for his wife, Barbara Amiel, at a posh New York restaurant in December 2000.
Mr. Black did not testify in his own defense, nor did the other co-defendants. Rather, through his lawyer, Mr. Black argued that he had done nothing wrong and was the victim of a betrayal by Mr. Radler and former directors who he had appointed but had turned against him amid the intense focus on corporate governance after the collapses of Enron and WorldCom. Unlike those companies, Hollinger International never faced financial collapse although most of its newspapers have now been sold and it is known as the Sun-Times Media Group.
- 180 Media & Entertainment