Conrad Black Convicted Of Obstruction Of Justice And Fraud

Conrad Black, the wealthy Canadian turned British noble who built the vast newspaper empire that included the Chicago Sun-Times, was convicted today of obstruction of justice and three counts of mail fraud in a scheme to swindle shareholders out of millions of dollars.

Post trial motions about sentencing, forfeiture and whether Black would be allowed to return to Toronto are underway this afternoon at the federal courthouse in Chicago where a jury handed down the convictions but also acquitted Black of nine charges, including wire fraud and a racketeering.

The convictions are expected to lead to prison time for the 62-year-old British Lord, who showed no visible reaction to the verdict. Black faces a maximum of 35 years in prison for the offenses the jury convicted him of, plus a maximum penalty of $1 million.

Sentencing has been set for Nov. 30.

Andrew Stoltmann, a securities lawyer who attended Friday's hearing, said he felt Black "had not that bad of a day'' given the number of counts he had faced. Stoltmann said the judge would have a great deal of discretion in sentencing and that he predicted a sentence of three to eight years was possible.

A federal jury in Chicago also found Black's three co-defendants guilty of three counts of mail fraud each. They are former Hollinger International vice presidents John Boultbee, 64, of Vancouver, Peter Y. Atkinson, 60, of Toronto, and attorney Mark Kipnis, 59, of Chicago. They face up to 15 years in prison and fines of up to $750,000.

The parties returned U.S. District Judge Amy St. Eve's courtroom at 11:15 a.m. this morning to begin post-trial motions and discuss bonds. All four defendants waived their right to a jury for upcoming forfeiture trials.

Black's attorney said the former press baron intended to return to Toronto and stay there until sentencing, at a later, undetermined date. Prosecutors said Black was a flight risk and asked that he be taken into custody immediately. Judge St. Eve was expected to rule on Black's bond this afternoon but already determined that Boultbee and Atkinson could return to Canada. Boultbee put up $1.5 million in assets and Atkinson put up his $2 million Napa Valley home to secure their appearances.

Prosecutors recommended sentencing ranges of 15 years to 20 years for Black and 7 to 10 years for Boultbee and Atkinson. No recommendations had yet been made for Kipnis. There were no decisions and motions were still being made during the morning court session.

Black's conviction marks the stunning downfall of one of Canada's most prominent businessmen, who used the power of the press to become an international celebrity, known as much for his right-wing views as for his jet-setting lifestyle.

Although not a household name in Chicago, the former Hollinger chairman, chief executive and controlling shareholder hobnobbed with business and political leaders from around the world. Black, 62, wrote biographies of former American presidents Franklin Delano Roosevelt and Richard Nixon, the latter published during his criminal trial.

He intermingled business and personal affairs, stacking the company's board of directors with other prominent conservatives, such as American diplomat Henry Kissinger and Richard Perle, the former assistant Secretary of Defense. His second wife, Barbara Amiel, an English-born journalist, also was on the board.

Hollinger outgrew its humble beginnings in Quebec to become the third-largest newspaper company in the world in the 1990s. Besides the Sun-Times, it owned the London Telegraph, the National Post in Canada, the Jerusalem Post and scores of smaller community papers. The company began selling assets in the late 1990s to reduce debt and is now known as the Sun-Times Media Group Inc.

Black was ousted as chairman in 2004, after an internal inquiry sparked by shareholder complaints found that he had obtained millions of dollars in unauthorized payments. The investigation led to criminal charges a year later again him and four top lieutenants.

The payments came under the guise of non-compete agreements made during sales of Hollinger newspapers. Black agreed not to compete in the markets where the papers circulated in exchange for cash payments. Prosecutors say the money should have gone to Hollinger's shareholders, not the executives.

Sphere: Related Content

No comments: