Jury finds Black guilty of criminal fraud

Sat Jul 14, 2007 12:06AM BST

By Andrew Stern

CHICAGO (Reuters) - A U.S. jury on Friday found Conrad Black guilty of criminal fraud and obstruction of justice in a grim Friday the 13th verdict that could send the former media baron to jail for up to 35 years.

Black was allowed to remain free on a $21 million (10.3 million pounds) bond pending a July 19 hearing on whether bond should be continued. His lawyers said he would appeal, and sentencing was set for November 30. Black surrendered his passport in court.

He left the courthouse without comment but his lawyer, Edward Greenspan, read a brief statement saying Black had been acquitted of the "central charges" in the case and there were "viable legal issues" on which to appeal.

Black and his three co-defendants were each convicted of three charges of mail fraud. Each fraud charge carried a potential five-year prison sentence. In addition, Black's obstruction conviction carried a possible 20-year sentence. Overall, Black was guilty in four of 13 charges against him.

Eric Sussman, the chief federal prosecutor, indicated the government would ask for at least 15 to 20 years' jail time.

Patrick Fitzgerald, the U.S. attorney in Chicago, said, "We are very satisfied with the jury's verdict ... it sends a message that anyone who breaks the law and violates the trust of the shareholders with their funds will be punished."

The 62-year-old, Canadian-born member of Britain's House of Lords -- who once derided the case against him as a "massive smear job" and "toilet seat" hanging around prosecutors' necks -- also faces millions of dollars in fines and forfeitures.

The jury acquitted Black of a racketeering charge and all four defendants were also found not guilty of failing to file corporate tax returns.

Black's three co-defendants, former Hollinger International Inc. chief financial officer Jack Boultbee, 64; Peter Atkinson, 60, former vice president and general counsel for the same company; and Mark Kipnis, 59, a former Hollinger lawyer, were all found guilty of the same mail fraud charges as Black.

The charges related to $3.5 million in payments from two separate deals involving the sale of media properties.

Black sat largely expressionless as the verdicts were read but a scowl crept across his face when he was found guilty of obstructing justice -- a charge that related to his removing cartons of records from his Toronto office.

Black's 25-year-old daughter, Alana, and columnist-wife Barbara Amiel Black leaned over to talk to him as he sat at the defence table.

"I would think he is in total shock. He really did believe he was innocent," Canadian author Peter Newman, who wrote a 1982 Black biography, told Reuters.

The flamboyant Black gave up his Canadian citizenship to accept his peerage but is now trying to get it back. He numbered Henry Kissinger, Donald Trump and other powerful figures among his confidants and lived a lifestyle that included travelling on his corporate jet for a holiday in Bora Bora and a lavish birthday party for his wife at a New York restaurant.

Judge Amy St. Eve of U.S. District Court, who presided over the trial, will decide amounts for fines and forfeitures, which could include Black's Palm Beach, Florida, estate and assorted other luxury items such as a $2.6 million diamond ring.

15 WEEKS OF TESTIMONY

Black and the others had been accused by U.S. prosecutors of pilfering $60 million in payments that should have benefited Hollinger International, once the world's third-largest English language newspaper chain, and its shareholders.

At one time, Hollinger's major newspaper holdings included such prominent names as the Daily Telegraph of London, the Jerusalem Post and Canada's National Post.

The verdict came after nearly 15 weeks of testimony in federal court. The prosecution was led by the office of Fitzgerald, who also prosecuted former White House aide Scooter Libby.

The jury of nine women and three men had considered the complex, 42-charge case for 12 days since it was handed to them on June 27.

In a trial that featured about 50 witnesses, prosecutors painted Black and his associates as no better than common thieves.

The defense said the men, who pleaded not guilty and did not take the stand in their own defense, were victims of overzealous prosecutors who failed to produce either a "smoking gun" or victims.

The government's star witness was long-time Black partner David Radler, who pleaded guilty to one count of fraud in an agreement that required him to testify against the four men in exchange for up to 29 months in jail.

The prosecution tried to show that Black and the others were just as guilty as Radler and, like him, lied about what they did. The defense depicted Radler as a serial liar.

Black was ousted as chairman of Hollinger International in 2003 after shareholders questioned the non-compete payment deals. An internal investigation in 2004 concluded that he and other executives oversaw a "corporate kleptocracy."

Hollinger International is now called the Sun-Times Media Group

Late on Friday, Sun-Times Media Group said it would pursue its civil lawsuit against its controlling shareholders and what it called certain former officers and directors.

The company said in a statement that a Special Committee was continuing to pursue Sun-Times Media's claims in U.S. District Court and had already recovered about $185 million from judgments against and settlements with former officers and directors and outside counsel.

(Additional reporting by James Kelleher and David Bailey in Chicago and Amran Abocar in Toronto)

 

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FACTBOX-Key facts about Conrad Black

The lord is now a felon.

In a brutal downfall, former media tycoon Conrad Black will be moving from a Toronto mansion to an American jail cell after a jury convicted him of fraud and obstruction of justice as part of a scheme to rip off shareholders.

» Click to enlarge image

Conrad Black arrives Friday at the Dirksen Federal Building with his wife, Barbara Amiel, to hear the verdict in his case. A jury convicted him of fraud and obstruction of justice as part of a scheme to rip off shareholders.
(Richard A. Chapman/Sun-Times)

» Click to enlarge image

Conrad Black (right) was convicted on three counts of mail fraud and one count of obstruction of justice. Also convicted were John Boultbee (top left) and Peter Atkinson (bottom left) both of Canada, and Mark Kipnis (top right). David Radler (bottom right) was a star witness against Black.
(Sun-Times/AP)

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Black, 62, a British lord who once controlled the world's third-largest media empire, could face 15 to 20 years in prison as well as forfeit millions of dollars to the federal government.

"Given the lavish lifestyle Black and the others lived, it will be a prince-to-pauper transformation," said Steve Miller, a former federal prosecutor now at the law firm of Reed Smith Sachnoff & Weaver in Chicago.

Also convicted of mail fraud were former Hollinger International executives John Boultbee, 64, and Peter Atkinson, 60, both of Canada, and Mark Kipnis, 59, a Northbrook attorney.

Criminal defense attorneys familiar with federal sentencing guidelines say one issue both sides will fight over is the amount of money shareholders actually lost -- one of the key factors that will drive Black's prison sentence. The total loss could be around $30 million.

Edward Greenspan, a Black attorney, told reporters his client plans to appeal, saying there are "viable legal issues."

"We vehemently disagree with the government's position on sentencing," Greenspan said.

The case focused on millions of dollars in bogus "non-compete" payments to the defendants in connection with U.S. newspaper transactions. Non-competes are common in the newspaper business and usually are paid by the buyer to keep the seller from competing in the same market.

The prosecution claimed the non-competes in this case were a ploy to skim money.

One payment was for $5.5 million to Black, Boultbee, Atkinson and former Chicago Sun-Times publisher David Radler for agreeing not to compete with a subsidiary of Hollinger International -- in other words, an agreement not to compete with themselves. The subsidiary then owned just one small newspaper in California.

Another payment involved the sale of a newspaper in Jamestown, N.D. The buyer testified that he hadn't wanted a non-compete agreement because he didn't think anyone would want to start a rival daily in a town of 10,000 people.

The obstruction charge involved Black removing 13 boxes of documents from his Toronto office while he knew he was under investigation -- an act caught on videotape and shown to the jury.

The prosecution wants to revoke Black's $21 million bond. Black surrendered his passport to U.S. District Court Judge Amy St. Eve and signed a waiver saying he would not fight extradition from Canada, but prosecutors contend that even with that waiver, it could take years to get Black back if he were to flee to Canada.

St. Eve will hear more on the matter Thursday. Until then, Black is not to leave the Chicago area.

The defense tried to persuade the jury that the payments were legitimate and that the prosecution was using Black's wealth to prejudice the jury, including mention of heated towel racks and $320 bottles of champagne.

U.S. Attorney Patrick Fitzgerald disagreed. "A lot of the evidence about lifestyle was necessary because it explained what the conduct was, what the motive for the conduct was," Fitzgerald said. "That's not class prejudice -- that's proving your case."

Black was not convicted of the so-called "perks" counts, including use of a company plane to vacation in Bora Bora and the company's partial payment for a glitzy $62,000 birthday party for his wife. He escaped conviction on nine counts, including racketeering, the most serious count against him.

On Friday morning, before the verdict was announced, the judge and jury waited on Black, who arrived 10 minutes late. Dressed in a tan suit, blue shirt and blue-and-red tie, Black showed no emotion as the verdict was read. His wife, conservative columnist Barbara Amiel Black, and daughter Alana Black looked solemn.

The three left the federal building out a back exit without speaking to a horde of Canadian, British and American reporters shouting questions in the courthouse lobby.

Hollinger International once owned community papers across the United States and Canada, as well as the Chicago Sun-Times, the Toronto-based National Post, the Daily Telegraph of London and Israel's Jerusalem Post. The Sun-Times is the only large paper remaining. The name of the company has been changed to Sun-Times Media Group Inc.

"The verdict lifts a dark burden and an uncertainty from a long period in the company history," said Cyrus Freidheim Jr., chief executive officer of Sun-Times Media Group. The trial is one of several steps the company is pursuing in seeking restitution, he said. That includes a $500 million lawsuit against Black, his wife, who was a former Hollinger director, and others.

Radler, who pleaded guilty in the case and was a witness against Black, already has repaid the company $63.4 million.

Evasive and combative on the stand, Radler was called a self-serving liar by the defense. Jurors said they had trouble with Radler's testimony and relied on other evidence to convict the defendants.

Hugh Totten, a Chicago attorney with the law firm of Perkins Coie who observed the trial, called the jury "incredible."

"They did a remarkable job of sifting through a mountain of evidence and reaching a common-sense verdict," Totten said.

Contributing:David Roeder, Rummana Hussain, Janet Rausa Fuller and Mark Konkol

Focus on Conrad Black's downfall

Conrad Black, the former press baron convicted of fraud, makes the front pages of most papers. His rise and fall is summed up in the Independent as a tragi-comedy of "arrogance and extravagance". The Daily Mail is not alone in showing his taste for excess with a picture of him and his wife in fancy dress as a cardinal and a French aristocrat. The Guardian meanwhile picks over the "private jets, parties and $4,000 towel warmer" as evidence of his high life. 'Stupid mistakes' The Times reflects on how Lord Black's career took him "from swaggering tycoon to uncommon criminal". And the Financial Times says that of all the chief executives facing jail for their crimes, he was "the most baroque and flamboyant". Jeff Randall, writing in the Daily Telegraph - the paper once owned by Lord Black, writes how he made some "astonishingly stupid mistakes". The worst, he says, was failing to spot shareholders turn against corruption. Nice serve, Gordon! The UK's "special relationship" with the US is under fresh strain, says the Daily Telegraph, after Lord Malloch Brown said they were no longer inseparable. The Foreign Office minister tells the paper he hopes for a more impartial foreign policy in the future. Several papers feature in a sequence of pictures of the prime minister showing a previously unknown talent for tennis. Clunking serve, Gordon! says the Daily Mail, while the Sun suggests he looked rather uncomfortable playing in a full suit. 'Roger and out' The Daily Mirror marks the arrival of the Beckhams in the US under the headline "American Idols". The Sun compares the Los Angeles welcome for David Beckham, who joins LA Galaxy soccer team, with the US hysteria for the Beatles in the 1960s. And it is goodbye to the police sign-off "Roger and out" as a new list of standardised words is introduced. Officers will now have to respond with "acknowledged" or "received" to keep communications concise, says the Sun.

Conrad Black profile: A ruthless tycoon

Every day of his fraud trial, Conrad Black sauntered into the courtroom in Chicago with the disdainful air of a man who had seen it all before. The attacks on his character, the carping at his business dealings and the outrage - tinged with envy - at his lavish lifestyle; Lord Black has made a career of taking on his critics and winning.

While many men would have buckled under the relentless storm of disapproval, Black carried on, fortified by his trademark characteristic - the supreme self-confidence that brooks no dissent.

"Humility is a good quality, though it can be overdone," he once told The Wall Street Journal, in a line that many critics and admirers would think a suitable epitaph.

Even his Canadian lawyer, Edward Greenspan, admitted in interviews before the trial that Black could appear to display "tremendous arrogance".

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But arrogance can only carry you so far, and it was this, coupled with extreme intelligence, that brought Black to his position as one of the most powerful media moguls on the planet, as well as one of the most controversial.

Certainly Black has never been one to bow to convention.

Born into a wealthy family in Montreal in 1944, his upbringing was unorthodox from the start. He was expelled from two schools - once for selling exam papers to fellow students - before graduating with a BA in history from Carleton University in Ottawa. Said to be neither athletic nor sporty as a youth, he would throw himself into his study of history, later writing a number of erudite and well-received biographies. In every life there are particular events on which the future turns and Black arrived at his first in 1969, when he met David Radler, the man who would become his business partner for more than 40 years. With a mutual acquaintance, Peter White, the men bought the Sherbrooke Record - one of only a handful of English-language local newspapers in Quebec. It was the beginning of a fruitful business partnership, but if the two men could ever be described as friends, it was a friendship based on respect and mutual gain rather than genuine warmth. As the court in his fraud case heard, they spent one single holiday together - a weekend trip to New Orleans early in their partnership. It was, as Black's defence sarcastically noted, a trip so successful it was never repeated. Black and Radler were different beasts with wildly different attitudes to life. As Paul Healy, a former vice-president at Hollinger, recently told Vanity Fair: "Black spent every dime he ever had, and Radler still has his first nickel". Despite their contrasting personalities, the partnership worked well. The court heard how Radler held the purse strings, while Black contributed articles and oversaw the editorial of the small paper. Between them, they made the venture a success.

The court heard how Black and Radler worked day and night to turn the loss-making paper into a venture turning healthy profits within a few months. Buoyed by their achievements at the Record, they sought other papers for sale offering the same potential. Before long, they were running a good-sized chain of local newspapers and profiting handsomely from it.

But Black had a vision that demanded more. Before the venture reached the heights of the third largest newspaper publisher in the world however, Black suffered a personal setback with the death of his parents in 1976 within two weeks of each other.

Crucially, the elder Black also owned a huge stake in Argus Corporation, Canada's largest holding company with interests that crossed every industry and every province of the country. It owned some of Canada's corporate jewels, among them a mining group, a large grocery chain and the Massey Ferguson tractor business. Bequeathing the shares to Conrad - then in his early 30s - he set his son on the road to his fortune. Even then, he was displaying the chutzpah that came to define his business dealings. In 1978 Bud McDougald, then regarded as an almost legendary businessman in Canada, died, leaving a power vacuum at the top of Argus.

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Two months later, Black convinced the dead magnate's wife and sister-in-law to sign documents that gave him effective control of the empire. Rivals wondered how he had managed it. Even the two women later expressed a wish, in hindsight, that they had acted differently. Black swiftly antagonised many in the Canadian business world. There were disputes over employee pensions and arguments over money transfers between companies in a presage of events that came to haunt him at Hollinger.

At about that time, his first biographer, Peter Newman, embarked on a series of interviews with him. He recently recalled one particular conversation that he said chilled him. "Greed," Black confessed, "has been severely underestimated and denigrated, unfairly so, in my opinion … It is a motive that has not failed to move me from time to time." As Newman wrote afterwards, "There exists a mile-wide streak of righteousness in the man, a glut of self-confidence that transcends run-of-the-mill arrogance." Yet it brought with it no small measure of success. With the takeover of Argus, Black had turned the £3.5 million inheritance from his father into a conglomerate worth £2 billion.

Crucially, that gave Hollinger international investors for the first time and brought the company under US corporate governance rules.By then his first marriage to Joanna Hishon - with whom he had two sons, Jonathan and James, and a daughter, Alana, had ended. In 1992, when his divorce was finalised, he married the conservative columnist Barbara Amiel.Together, while Hollinger International was at its height, the pair lived a gilded life, enjoying homes in Toronto, New York, London and Florida and a staff of butlers, drivers, gardeners and chefs.

They moved in exalted circles, enjoying the company of the super-rich as well as ambassadors, politicians, entertainers and opinion formers. The jurors in his fraud case heard plenty of evidence as to the extent of Black's lavish life.The apartment in New York was decked out with objets d'art costing tens of thousands of dollars. There were marble elephants, oriental rugs, figurines, even a wooden cabinet containing the porcelain bottle Napoleon had used during his 1812 invasion of Russia.

The court also heard about the £30,000 birthday party thrown for Lady Black in the exclusive Manhattan restaurant La Grenouille - part of which was paid with company money. Even jogging kit for Lady Black was said to have been bought by Hollinger.

Then there was the trip to Bora Bora - a resort in French Polynesia - that the couple took on Hollinger International's jet. Despite the cost, it was not a success.

Black wrote to a friend afterwards: "We just got back yesterday from a shambles of a trip to the South Pacific, where I came down with bronchitis and almost died snorkeling as a result. We felt like geriatric freaks among a sea of honeymooners - loutish young men and their perky wives."

There were rumblings about the cost of the flight, putting Black on the defensive in the bombastic style that was his trademark.

"There has not been an occasion for many months that I got on our plane without wondering whether it was really affordable," he said in a revealing 2002 email that formed part of the prosecution case but was never presented to the jury. "But I'm not prepared to re-enact the French revolutionary renunciation of the rights of the nobility."

Similar views would be repeated in numerous emails shown to the court. "We have a certain style that shareholders were aware of when they came in," he wrote. "We should fine-tune that style, not revolutionise it with a Damascene conversion to vows of poverty."

By the latter years of the 20th century, just as Black was fighting Canadian politicians over his right to take up a seat in the House of Lords, his acumen led him to presume - rightly, as it turned out - that the valuations of newspapers had reached their peak.

The growth of the internet led many readers to get their news elsewhere, and that, coupled with the debt with which Hollinger had saddled itself, persuaded Black to begin a root and branch sale of the local newspapers that had served the company so well.

At some point during these deals - at least according to Radler - occurred the brainwave that led to Black standing trial.

When companies sell newspapers, the deals often include non-competition agreements which include payments to the sellers to prevent them using their local knowledge to set up a rival newspaper to the one they have just sold.

Such agreements were common in the deals Hollinger struck when selling its newspapers. But payments to individuals, rather than the companies they represented, were not.

However Radler testified that when the disposals were under way in 2000, he had a key conversation with Black. "He suggested that we insert ourselves into the non-compete process and I agreed," Radler said in evidence.

In subsequent deals, Black, Radler - who pleaded guilty to one count of fraud - and other executives all received hefty payments. Whether these payments were justified or were approved by directors was the subject the jurors spent the past four months contemplating.

A letter from one investor in 2003 complaining about the way the company was run prompted other shareholders, regulators and ultimately US prosecutors to take a closer look at Hollinger International's dealings, and the company subsequently unravelled fast.

No comfort for Conrad Black

By Joshua Rozenberg, Legal Editor

Conrad Black can take no comfort from the fact that he was found not guilty on most of the charges he faced. Nor is it much of an excuse that the amount involved was less than $3 million. One conviction for fraud is normally enough to kill off a career in business. Black now has three. Add to this his conviction for obstruction of justice, with its maximum sentence of 20 years, and the man is finished.

US prosecutors argue for particular sentences in a way that would be regarded as unseemly in Britain. Eric Sussman, who prosecuted Black, told the court that he was "very conservatively" looking at 15 to 20 years in jail. Black may also be ordered to pay millions of dollars in fines.Defendants convicted in the US often seem to receive longer sentences than they might receive for similar offences in Britain. It is hard to escape the view that this is the consequence of plea-bargaining.

In the US, a defendant will be offered a substantial discount from a potential sentence in exchange for a plea of guilty, especially if he promises to implicate others. That happened in this case. David Radler pleaded guilty to one count of fraud in exchange for up to 29 months in jail. He also agreed to testify against the other defendants. Pleading not guilty in the US is therefore a high-risk strategy: either you are acquitted or you go to prison for a very long time. The US courts appear much less forgiving of fraud than the English courts. But Black was tried by a jury, in much the same way as if he had been prosecuted in London.

Cameras were banned from the courtroom, as they would have been in England. This was no doubt intended to avoid the histrionics that have disfigured other high-profile US trials. The most notorious of these involved the acquittal of OJ Simpson, the football star, of a double murder. Black also had the advantage that he could object to particular jurors before the trial began. Apart from that, the only significant difference between a trial in Chicago and one at the Old Bailey is that all the jurors had to be sure he was guilty before they could return their verdicts. In England, a majority verdict of 10 to two is acceptable. In Scotland, a bare majority of eight to seven would be enough.

There is of course to be an appeal against conviction, and Black will throw everything he can into it. There may have been legal errors during the trial, though none has yet come to light. In the absence of mistakes of law, appeal courts are generally very reluctant to overturn the verdict of a jury. They take the view that juries have heard all the evidence, and are therefore the best people to decide guilt or innocence. No doubt Black will also challenge the length of his sentence, once that has been decided.

Appeal courts in the US are well used to reducing damages awarded by juries in civil cases, but a decision by a judge is much less vulnerable to appeal. One possibility Black may consider is asking to serve his sentence in a British prison. This is permitted under a US-UK agreement, but each case is considered on an individual basis. A transfer would not be considered until Black has exhausted all his avenues of appeal, or decided not to exercise them.

He would not serve a day less if he were transferred to an English jail: remission and other discounts do not apply to sentences passed by foreign courts. If he is transferred to Britain, Black can expect to serve his sentence in an open prison. But that would merely enable newspapers to photograph him and write about him at regular intervals, a humiliation he might prefer to avoid by remaining in the United States. It seems unlikely Black would want to serve his sentence in his native Canada. He will not, of course, be able to sit in the House of Lords while he is serving his sentence - even as a cross-bencher. But he cannot be stripped of his peerage without an Act of Parliament. Other honours, such as knighthoods, may be taken away from those who act dishonourably, and the Government proposed in a recent White Paper that this principle should be extended to peerages. But this has not yet been made law.

The chances are, though, the Government will revive and implement the proposal long before Black is released. He could then be removed from the peerage retrospectively. As a convicted criminal, Black will also be expected to resign from his London club. One consequence of Black’s conviction is that he will not be able to go ahead with his pledge to bring libel proceedings against his unauthorised biographer, Tom Bower. He also sued a special committee of Hollinger International, the company he once owned, after it accused him in October 2004 of running the firm like a "corporate kleptocracy". His inability to sue for libel is not just a consequence of his cash shortage - he can expect most of his assets to be confiscated - but because he no longer has a reputation to vindicate in the libel courts. He is himself being sued for £271m by Hollinger International, now called the Sun-Times Media Group.

The company is taking Black and other former executives to court for negligence, breach of contract and unjust enrichment - pocketing money to which he was not entitled. In Canada, his former holding company Hollinger Inc has also launched a £351m lawsuit against its former director. Canadian investors also have a class-action lawsuit running against Black, his wife Barbara Amiel, his former colleague David Radler and others, in a bid to recover market losses.

Conrad Black to appeal guilty verdicts Fri Jul 13, 2007
CHICAGO (Reuters) - A lawyer for former media mogul Conrad Black told a U.S. court on Friday that Black plans to appeal the four guilty verdicts on charges that he and associates skimmed millions of dollars from the newspaper publisher he once controlled. Earlier Friday, a U.S. jury found Black guilty on four of 13 counts of criminal mail fraud and obstruction of justice after a trial that lasted almost 15 weeks.

Associated Press
Charges in Conrad Black Case
By The Associated Press 07.13.07

Following are descriptions of the charges a jury found Conrad Black guilty of on Friday:

Count 1, Mail fraud: Relates to $2.9 million in noncompete agreements with American Publishing Corp., which was a subsidiary of Hollinger International (nyse: HLR - news - people ).

Count 6, Mail fraud: Relates to noncompete agreements with American Publishing Corp., as described above.

Count 7: Mail fraud: Relates to "supplemental payments" made after Hollinger executives realized there had been no non-competition money in sales of community newspapers to Horizon Publications Inc. and to Forum Communications Inc.

Profile: Conrad Black, fallen media baron

A billionaire media baron with a taste for a lavish lifestyle, Conrad Moffat Black is no stranger to the spotlight.

The flamboyant larger-than-life character with a ruthless business mind bought his first newspaper more than 30 years ago and went on to run hundreds of titles around the world, including the Daily Telegraph.

With homes in New York, Toronto, Florida and London, the socialite is known to enjoy the company of the rich, powerful and famous, with his glamorous second wife, journalist Barbara Amiel, 66, by his side.

But Lord Black of Crossharbour has seen his empire and power unravel in the space of four years as he faced the racketeering, fraud and obstruction of justice charges.

He was born in Montreal, Canada, on August 25 1944. His father George was a wealthy brewery executive. Black’s entrepreneurial skills first caused him trouble when he was expelled as a 14-year-old student from Toronto’s elite Upper Canada College after he made 1,400 dollars by selling his classmates’ stolen exams.

He went on to read history at Carleton University, law at Laval and achieved an MA from McGill before he bought his first newspaper, the Eastern Townships Advertiser in Quebec, in 1966.

His media empire began to develop as he bought more small Canadian newspapers before he co-founded the Sterling Newspapers Group in 1971.

Seven years later, he became chair of the Argus Corporation, from which he launched the Hollinger group.

By the 1990s, Hollinger controlled 60 per cent of Canadian newspapers, along with hundreds of dailies in England, the US, Australia and Israel.

At its peak in 1999, Hollinger had revenues of more than two billion dollars and Black was publisher of the third-biggest group of newspapers in the world.

Black’s first marriage was to Joanne (born Shirley) Hishon, of Montreal, by whom he has two sons, Jonathan David Conrad and James Patrick Leonard Black, and a daughter, Alana Whitney Elizabeth Black. The couple divorced in 1992, the same year that Black married Watford-born Barbara Amiel.

He hit the headlines again when the British Government moved to ennoble him and was opposed by Canadian prime minister Jean Chretien, who used the Nickle Resolution of 1919 to rule that foreign governments could not grant honours to Canadians that carry a title of privilege.

After an unsuccessful court challenge, Black renounced his Canadian citizenship and was officially inducted into the House of Lords as Lord Black of Crossharbour on October 31 2001.

Crossharbour lies near to what was then the site of the Daily Telegraph building in the Docklands, one of the crown jewels of the Hollinger International empire.

During these glory days at the turn of the century, Black and his second wife Barbara were known for throwing lavish parties in their Kensington home in London. The couple also owned mansions in Toronto and Palm Beach, Florida, along with an apartment on Park Avenue, Manhattan.

During the trial, a long list of the trappings of wealth that Black used to make this company flat, near New York’s Central Park, habitable emerged.

These included Napoleon Bonaparte’s shaving stand and a set of marble elephant carvings that cost 17,710 dollars (£8,900), a heated towel rail which cost 4,399 dollars (£2,200), and a 9,800 dollar (<AC163>4,900) set of Louis XVI painted stools with rails carved in a Guilloche pattern.

He also developed a reputation as a merciless businessman with a love of suing anyone who crossed him.

But by 2003, his downfall had begun.

Black lost control of Hollinger International, his newspaper empire that stretched from Canada halfway across the world, when minority shareholders in the US accused him of siphoning off millions of dollars of their money in unauthorised payments to himself.

A special committee of Hollinger’s board found what it called evidence of “excessive” fees paid to Black and other executives, and demanded repayment. Black brushed off the allegations, writing to the company’s investor relations officer: “Two years from now, no one will remember any of this.”

But he was ousted as chief executive in November 2003 and, two months later, also lost his chairmanship as the company sought 200 million dollars (£100 million) in damages in a suit filed against him in Chicago.

Hollinger Inc, the Toronto-based parent company of the publishing company, also filed lawsuits.

Black countersued and then tried to sell Hollinger’s key newspaper titles to the Barclay brothers, but was blocked in court by Hollinger International.

On August 31 2004, the special committee’s damning report, which accused Black of running Hollinger like a “corporate kleptocracy”, was made public by the US Securities and Exchange Commission.

The report accused Black and other executives of taking hundreds of millions of dollars that they were not entitled to. Black sued the special committee for defamation.

Then in September 2005, Black’s former associate and long-term friend David Radler pleaded guilty to a single count of mail fraud as part of a scheme to divert more than $32 million dollars (£16 million) from Hollinger International.

Radler agreed to testify for the US government and was given a reduced sentence of 29 months in jail.

Black’s Toronto-based holding company, Ravelston, was also charged and pleaded guilty, despite Black’s objections, to one count of mail fraud.

Criminal charges of racketeering, obstruction of justice and money laundering were laid against Black in December 2005, followed by charges of criminal tax evasion the following year.

Black said he was entitled to the so-called “non-compete” payments which he was given, and described the allegations as “monstrous defamations”. Even some of Black’s critics acknowledge he believes he has done nothing wrong. Meanwhile, Black is also trying to regain his Canadian citizenship.

In an opinion piece headlined “I am not afraid”, which was published before his trial began, Black wrote: “I have never been happier to be Canadian.”

The 62-year-old has also published books on a number of topics, including the 2003 biography Franklin Delano Roosevelt: Champion Of Freedom, which was described by Publisher’s Weekly as “not only the best one-volume life of the 32nd president but the best at any length, bound to be widely read and discussed”.

Published Saturday, July 14, 2007

Conrad Black, Ex-Press Baron, Guilty of Fraud

The former executive was accused of stealing $60 million from Hollinger, once the world's third-largest publisher of English-language newspapers. Prosecutors said the money was disguised as fees he and two codefendants got for not competing with buyers of about $3 billion of newspapers Hollinger sold.

According to earlier reports, the committee investigating alleged financial wrongdoing by Black had been unable to account for dividend payments from Cayman Free Press of some $1.5 million.
“The government overcame a very shaky start to win this case,” said Jacob Frenkel, a former federal prosecutor now in private practice in Rockville, Maryland. “They were able to pull a rabbit out of the hat.”

A federal court jury of nine women and three men returned the verdicts after a 15-week trial and 12 days of deliberations. Jurors resumed their work July 10 on orders of US District Judge Amy St Eve after saying they couldn't unanimously agree on all the charges against the four.

Convicted with Black were former Hollinger Vice President Peter Atkinson, 60, ex-Chief Financial Officer John Boultbee, 64, and ex-General Counsel Mark Kipnis, 59. Atkinson and Boultbee were accused of stealing through the non-compete agreements. Kipnis was accused of helping the others steal.

Black faces 20 years in prison on the most serious conviction, for obstruction of justice. The three fraud charges carry a maximum penalty of five years each.

Black has been free on $21 million bail. Lead prosecutor Eric Sussman asked St Eve after the verdicts to revoke the former CEO's bond, saying he faces at least 15 to 20 years in prison.

“He has had his day in court,” Sussman said. “Will he show up for sentencing?”

A lawyer for Black argued the bail should continue.

“We have a very visible man who is followed around by reporters wherever he goes,” defense attorney Edward Genson said. “He has no incentive to flee.”

St Eve said she will decide on Black's bail later. She allowed Atkinson and Boultbee, who Sussman said face seven to 10 years in prison, to remain free.

Before the verdict was read, Black began breathing deeply, his shoulders moving up and down. He didn't visibly react on hearing the first guilty verdict and leafed through his verdict form as the other decisions were being read.

“He's doing okay,” Black's lawyer Edward Greenspan said later of his client.

Since Enron Corp. collapsed in 2001, prosecutors convicted every chief executive officer tried for accounting fraud or other major corporate crime. Black was the last targeted CEO to be tried.

Those convicted include former CEOs Kenneth Lay and Jeffrey Skilling, 53, of Enron; Bernard Ebbers, 65, of WorldCom; L. Dennis Kozlowski, 60, of Tyco International; Joseph Nacchio, 58, of Qwest Communications; Richard Scrushy, 54, of HealthSouth; and John Rigas, 82, of Adelphia Communications.

Lay's conviction was voided last year because he died at age 64 before he could complete his appeals.

Scrushy, who led the largest US operator of rehabilitation hospitals, was acquitted of accounting-fraud charges, then convicted of bribing the governor of Alabama to gain a seat on a state hospital board.

Prosecutors told jurors in closing arguments that Black and his codefendants “systematically stole” the millions, leaving a “phony paper trail.” No defendant took the witness stand.

Defence lawyers said the non-compete agreements were required conditions of selling the newspapers. Black's lawyer asked jurors not to convict him just because he's rich.

Black was forced to resign as Hollinger's CEO in November 2003 after an internal investigation concluded he and the other executives paid themselves $15.6 million without board approval. Two months later, the board fired Black as chairman and sued him for $200 million. The four men were indicted in 2005.

A board-commissioned report by former Securities and Exchange Commission Chairman Richard Breeden claimed in August 2004 that Black and other insiders diverted $400 million, 95 percent of Hollinger's adjusted net income from 1997 to 2003, from the company. Black's libel suit against Breeden is pending.

The chief government witness at the trial was former Hollinger President David Radler. He pleaded guilty to a single fraud count stemming from the non-compete-fee scheme.

Radler told jurors that Black oversaw the diversion of Hollinger money to its parent, the Toronto-based holding company Hollinger Inc., which Black controlled.

Black was found not guilty of cheating shareholders by spending company money for personal expenses, including $500,000 to use a company jet to fly to the Pacific island of Bora Bora for a vacation, billing Hollinger for two-thirds of a $62,000 birthday party for his wife, Barbara Amiel Black, and for the renovation of their Park Avenue home.

Hollinger, at its peak, trailed only News Corp. and Gannett Co. in publishing English-language newspapers, including the Chicago Sun-Times, the U.K.'s Daily Telegraph, Canada's National Post, the Jerusalem Post and hundreds of community newspapers. The company is now called Sun-Times Media Group Inc.

Black, 6-foot-1, silver-haired and barrel-chested, was raised in Toronto's wealthy Bridle Path neighborhood and owned homes in Toronto, London, New York and Palm Beach. He wielded power as a wealthy media owner and member of Britain's House of Lords as Lord Black of Crossharbour. He renounced his Canadian citizenship to become a British peer.

Conrad Black May Be Sorry He Gave Up Cdn. Citizenship

What happens now to Conrad Black? That appears to the million dollar - or more -  question. Black was found guilty of four charges in a Chicago courtroom Friday, and all of them were serious enough to warrant the pending loss of both his freedom and a big chunk of his money. He'll learn his fate on November 30th.

What would it be like for a man of his wealth and stature to wind up going from luxury to the starkness of a prison cell? Friends say that prospect is "devastating", while others predict it's Black's legacy in business  history that seems to upset the former British Lord even more. "It's not the crime, it's the demolishing of Conrad's life's work," agrees his friend and columnist Mark Steyn. "It's the knowledge that the first draft of history is going to be written by all your enemies, by all these kinds of jackals from Fleet Street who skipped the last four months but flew in here for the walk to the scaffold."

Those who have followed Black's career believe he will be defiant to the end, stubbornly assuring he did nothing wrong. "His vision of himself is that he is a romantic rebel" much like former U.S. presidents Franklin D. Roosevelt and Richard Nixon,  Napoleon, Winston Churchill and the other historical figures he admires, suggests biographer George Tombs. "If things go badly it's other people's fault."

That includes his closest associate, David Radler, who Black believed would never betray him. "No matter what happens, people aren't allowed to turn on him," Tombs adds. "He tends to see himself as a master strategist and he's moving the pieces on the chess board."

Black has been forced to surrender his passport and will remain in Chicago until his sentencing. He may well rue the day he gave up his Canadian citizenship. "He can reapply," suggests lawyer Lorne Honickman, the host of "Legal Briefs" on CP24. "And my guess is he will reapply immediately ... If he was a Canadian citizen, as is David Radler,  we have an agreement with the United States, a prisoner exchange program where you can make the application to serve your sentence In Canada. That happens on a daily basis. Now, not necessarily a slam-dunk but you can't do it if you are not a Canadian citizen."

Black renounced his citizenship in order to take a seat in the British House of Lords, a move that raised eyebrows in his home and native land.

• His legal woes are far from over, however, as he will have to face off against regulatory commissions, both American and Canadian, as well as a number of lawsuits. Waiting in the wings are Black's former companies, Hollinger Inc., Hollinger International and many bitter investors forming class-action suits.

We asked you what you think of the Conrad Black verdict. Here's what you had to say.

The rich and powerful need to know that they are not immune from punishment for committing crimes. A classic case of greed.
Henrietta Penny, Mississauga

What a farce and waste of time and resources. Why does the justice system not apply these valuable resources against real criminals, such as child molesters? They now mostly get probation against a prospective 35 years for Conrad Black for mostly contrived charges, even though the investors ended up much better off with him in control.
Allan Taylor, Oakville

We are losing a truly great Canadian icon. I hope that his appeal will not bankrupt him and that justice for Conrad Black prevails. My prayers and thoughts are with the honourable Lord Black and his family.
Michael Weir, Toronto

I think white collar crime is just the same as any other, except that it has the benefit of being less personal. If the jury of his peers decided, that’s the way it goes. Money shouldn't make you above the law.
Chris Van Abbema, Pickering

A fair verdict. One cannot commit fraud, etc. and expect to get off lightly, or at all.
Sean Beckett, Toronto

I don't know if John Chrétien is a spiteful man but I just have to think he is smiling knowing Conrad surrendered his Canadian citizenship.
Tom Macmillan, Brockville Ont.

Kudos to the American legal system and the jury. I am happy to see that even the best lawyers don't provide an automatic ‘get out of jail free’ card. I hope I live long enough to see Lord Black do one day in jail, after all the appeals.
Mike Wedmann, Etobicoke

I think that was the main problem for this trial was the fact that there were no victims presented, so in the minds of the jury it was a victimless crime, unlike Enron.
James McKilliop, London, Ont.

Black's surreptitious entry and unlawful removal of files from his office was the lightening rod for me. Yes, a very fair verdict indeed.
Barry Ruhl, Southampton, Ont.

Anyone who holds a position of trust, especially someone who has a high profile such as Mr. Black, must respect the responsibility that he has to his shareholders and to the public at large as to how someone with power and authority must conduct oneself. I only hope that this will prove to a humbling experience for him and that he will walk away a better person for it.
Susan Cain, Brampton

Conrad Black guilty of fraud

Former media tycoon to appeal verdict finding him guilty of three counts of fraud, one count of obstruction of justice.

CHICAGO (CNN) -- Former media tycoon Conrad Black, who was found guilty on Friday of mail fraud and obstruction of justice for his role in defrauding shareholders of Hollinger International and skimming $60 million from the newspaper conglomerate, will appeal the jury's verdict, Black's attorney Edward Greenspan said upon leaving the courthouse.

Black could face 15-1/2 to 20 years in prison, if the judge accepts the prosecutor's recommendation

"We intend to appeal," said Greenspan. "We vehemently disagree with the government's position on sentencing. We believe based on the conviction of the charges here that the sentences for this type of offense are far less than what the government suggested."

At a later press conference, Patrick Fitzgerald, the lead U.S. Attorney prosecuting the case, suggested that 15-1/2 to 20 years could represent a "conservative estimate of the guidelines range," but added that a judge "will decide what the sentence is based on all the appropriate factors." Black could also pay up to $1 million in fines.

His associates Peter Atkinson, 60, of Oakville, Ontario, Jack Boultbee, 64, of Victoria, British Columbia, and Mark Kipnis, 59, of Northbrook, Illinois, were also found guilty on mail fraud charges. Each could serve up to 15 years in jail.

The court ruled that Boultbee and Atkinson will be allowed to return to Canada to serve their prison sentences.

After the verdict was announced, Fitzgerald described his reaction to the decision as "gratified."

"We think the verdict vindicates the serious public interest in making sure that when insiders in a corporation deal with money entrusted to them by the shareholders that they not break the law to benefit themselves instead of the shareholders," he said.

"The government wins, Black loses. End of story," said CNN Senior Legal Analyst Jeffrey Toobin.

On the 12th day of deliberations, the Chicago jury acquitted Black, 62, of Toronto, Ontario, of wire fraud, tax fraud and racketeering charges.

The guilty verdicts - on three counts of mail fraud and one count of obstructing justice - put Black's vast personal fortune at risk.

After appearing calm and collected entering the court, Black did not show any visible, emotional reaction once the verdicts were read.

Black has been restricted to the Chicago area and his passport has been handed over to the police until a sentencing hearing set for November 30 at 9 a.m. ET.

"Conrad Black will complete a remarkable fall from grace. He will certainly be sentenced to prison, perhaps for a considerable period of time," said Toobin.

Black did not testify in the trial.

Because he is British, he could serve his time in the United States or be transferred to a British prison.

The case was heard in the U.S. Illinois Northern District court.

During the trial, which began in March, U.S. federal prosecutors described the lavish, eccentric lifestyles of Lord Black and his wife, Lady Barbara Amiel, a journalist.

The case centered on an alleged corporate victim. Unlike the Enron case, this one resulted in no major loss of jobs, worker suffering or company collapse.

Nearly all the prosecution witnesses were granted immunity or allowed to plea bargain.

Black is "sort of [a] bad-boy celebrity," said George Tombs, who is writing his second biography about Black, to be published this fall. "This is somebody who's had tremendous power and he's lost it."

Legal troubles for Hollinger International and Black began in mid-2004, when the U.S. Securities and Exchange Commission published a report alleging "racketeering" and "corporate kleptocracy," which led to a $1.25 billion racketeering suit against Hollinger and Black.

That fall, after a U.S. federal judge threw out the racketeering suit, Black resigned as chairman and chief executive officer of Hollinger.

Months later, the SEC filed a civil fraud lawsuit against Black, Hollinger's former deputy chairman and chief operating officer, David Radler, and Hollinger.

"Black, Radler and other top executives didn't understand that investors had handed over their money in order to make more money, not to gain entree to a 'private gentleman's club,'" said Tombs, who added that the defendants "continued operating like they did in the '50s from the old Toronto days, wining, dining and schmoozing."

Federal prosecutors, under the guidance of Fitzgerald, said Black and the other three defendants defrauded shareholders of Hollinger International by collecting "non-compete" payments from the sales of media holdings.

In a non-compete, the seller agrees - in exchange for a payment - not to compete in the buyer's market. The prosecution argued that the payments ended up in the pockets of the defendants, as tax-free bonuses, instead of in the company coffers.

"Why were these men getting paid for non-competes that the buyer never requested?" asked Assistant U.S. Attorney Eric Sussman in his closing statement. "Why were they entitled to take this money and lie about it?"

The defense lawyers said shareholders and company directors had approved the payments.

The prosecution had originally hoped Radler would be their star witness. In exchange for a reduced jail sentence, Radler pleaded guilty in 2005 to fraud and agreed to cooperate with prosecutors.

But near the end of 25 hours of closing arguments, the prosecution changed course and instead labeled him as a "criminal" and "fraudster."

"You do not need to believe a single word David Radler told you to convict each and every one of these defendants," Sussman told the jury.

Tombs described Black as a modern-day Citizen Kane, a man who "had it all and lost it all."

In the early 1990s, Hollinger controlled 60 percent of Canadian newspapers in addition to hundreds of dailies worldwide, including the Chicago Sun-Times, the Montreal Gazette, Britain's Daily Telegraph and the Jerusalem Post.

Tombs said Black reveled in the pageantry of power. In 1999, the British government moved to make him a life peer of the British House of Lords, but Canada does not allow its citizens to carry the title. Black overcame that obstacle in 2001, when he renounced his Canadian citizenship and became Lord Black of Crossharbour, named for the London subway stop near The Daily Telegraph.

-- CNN's Maria Dugandzic and Nick McGurk contributed to this report 

Conrad Black convicted of fraud

Press Association
Friday July 13, 2007 6:13 PM

Fallen media mogul Conrad Black is facing jail after being convicted of fraud and obstruction of justice.

Conrad Black May Be Sorry He Gave Up Cdn. Citizenship

What happens now to Conrad Black? That appears to the million dollar - or more -  question. Black was found guilty of four charges in a Chicago courtroom Friday, and all of them were serious enough to warrant the pending loss of both his freedom and a big chunk of his money. He'll learn his fate on November 30th.

What would it be like for a man of his wealth and stature to wind up going from luxury to the starkness of a prison cell? Friends say that prospect is "devastating", while others predict it's Black's legacy in business  history that seems to upset the former British Lord even more. "It's not the crime, it's the demolishing of Conrad's life's work," agrees his friend and columnist Mark Steyn. "It's the knowledge that the first draft of history is going to be written by all your enemies, by all these kinds of jackals from Fleet Street who skipped the last four months but flew in here for the walk to the scaffold."

Those who have followed Black's career believe he will be defiant to the end, stubbornly assuring he did nothing wrong. "His vision of himself is that he is a romantic rebel" much like former U.S. presidents Franklin D. Roosevelt and Richard Nixon,  Napoleon, Winston Churchill and the other historical figures he admires, suggests biographer George Tombs. "If things go badly it's other people's fault."

That includes his closest associate, David Radler, who Black believed would never betray him. "No matter what happens, people aren't allowed to turn on him," Tombs adds. "He tends to see himself as a master strategist and he's moving the pieces on the chess board."

Black has been forced to surrender his passport and will remain in Chicago until his sentencing. He may well rue the day he gave up his Canadian citizenship. "He can reapply," suggests lawyer Lorne Honickman, the host of "Legal Briefs" on CP24. "And my guess is he will reapply immediately ... If he was a Canadian citizen, as is David Radler,  we have an agreement with the United States, a prisoner exchange program where you can make the application to serve your sentence In Canada. That happens on a daily basis. Now, not necessarily a slam-dunk but you can't do it if you are not a Canadian citizen."

Black renounced his citizenship in order to take a seat in the British House of Lords, a move that raised eyebrows in his home and native land.

• His legal woes are far from over, however, as he will have to face off against regulatory commissions, both American and Canadian, as well as a number of lawsuits. Waiting in the wings are Black's former companies, Hollinger Inc., Hollinger International and many bitter investors forming class-action suits.

We asked you what you think of the Conrad Black verdict. Here's what you had to say.

The rich and powerful need to know that they are not immune from punishment for committing crimes. A classic case of greed.
Henrietta Penny, Mississauga

What a farce and waste of time and resources. Why does the justice system not apply these valuable resources against real criminals, such as child molesters? They now mostly get probation against a prospective 35 years for Conrad Black for mostly contrived charges, even though the investors ended up much better off with him in control.
Allan Taylor, Oakville

We are losing a truly great Canadian icon. I hope that his appeal will not bankrupt him and that justice for Conrad Black prevails. My prayers and thoughts are with the honourable Lord Black and his family.
Michael Weir, Toronto

I think white collar crime is just the same as any other, except that it has the benefit of being less personal. If the jury of his peers decided, that’s the way it goes. Money shouldn't make you above the law.
Chris Van Abbema, Pickering

A fair verdict. One cannot commit fraud, etc. and expect to get off lightly, or at all.
Sean Beckett, Toronto

I don't know if John Chrétien is a spiteful man but I just have to think he is smiling knowing Conrad surrendered his Canadian citizenship.
Tom Macmillan, Brockville Ont.

Kudos to the American legal system and the jury. I am happy to see that even the best lawyers don't provide an automatic ‘get out of jail free’ card. I hope I live long enough to see Lord Black do one day in jail, after all the appeals.
Mike Wedmann, Etobicoke

I think that was the main problem for this trial was the fact that there were no victims presented, so in the minds of the jury it was a victimless crime, unlike Enron.
James McKilliop, London, Ont.

Black's surreptitious entry and unlawful removal of files from his office was the lightening rod for me. Yes, a very fair verdict indeed.
Barry Ruhl, Southampton, Ont.

Anyone who holds a position of trust, especially someone who has a high profile such as Mr. Black, must respect the responsibility that he has to his shareholders and to the public at large as to how someone with power and authority must conduct oneself. I only hope that this will prove to a humbling experience for him and that he will walk away a better person for it.
Susan Cain, Brampton

Conrad Black guilty of fraud

Former media tycoon to appeal verdict finding him guilty of three counts of fraud, one count of obstruction of justice.

CHICAGO (CNN) -- Former media tycoon Conrad Black, who was found guilty on Friday of mail fraud and obstruction of justice for his role in defrauding shareholders of Hollinger International and skimming $60 million from the newspaper conglomerate, will appeal the jury's verdict, Black's attorney Edward Greenspan said upon leaving the courthouse.

Black could face 15-1/2 to 20 years in prison, if the judge accepts the prosecutor's recommendation

"We intend to appeal," said Greenspan. "We vehemently disagree with the government's position on sentencing. We believe based on the conviction of the charges here that the sentences for this type of offense are far less than what the government suggested."

At a later press conference, Patrick Fitzgerald, the lead U.S. Attorney prosecuting the case, suggested that 15-1/2 to 20 years could represent a "conservative estimate of the guidelines range," but added that a judge "will decide what the sentence is based on all the appropriate factors." Black could also pay up to $1 million in fines.

His associates Peter Atkinson, 60, of Oakville, Ontario, Jack Boultbee, 64, of Victoria, British Columbia, and Mark Kipnis, 59, of Northbrook, Illinois, were also found guilty on mail fraud charges. Each could serve up to 15 years in jail.

The court ruled that Boultbee and Atkinson will be allowed to return to Canada to serve their prison sentences.

After the verdict was announced, Fitzgerald described his reaction to the decision as "gratified."

"We think the verdict vindicates the serious public interest in making sure that when insiders in a corporation deal with money entrusted to them by the shareholders that they not break the law to benefit themselves instead of the shareholders," he said.

"The government wins, Black loses. End of story," said CNN Senior Legal Analyst Jeffrey Toobin.

On the 12th day of deliberations, the Chicago jury acquitted Black, 62, of Toronto, Ontario, of wire fraud, tax fraud and racketeering charges.

The guilty verdicts - on three counts of mail fraud and one count of obstructing justice - put Black's vast personal fortune at risk.

After appearing calm and collected entering the court, Black did not show any visible, emotional reaction once the verdicts were read.

Black has been restricted to the Chicago area and his passport has been handed over to the police until a sentencing hearing set for November 30 at 9 a.m. ET.

"Conrad Black will complete a remarkable fall from grace. He will certainly be sentenced to prison, perhaps for a considerable period of time," said Toobin.

Black did not testify in the trial.

Because he is British, he could serve his time in the United States or be transferred to a British prison.

The case was heard in the U.S. Illinois Northern District court.

During the trial, which began in March, U.S. federal prosecutors described the lavish, eccentric lifestyles of Lord Black and his wife, Lady Barbara Amiel, a journalist.

The case centered on an alleged corporate victim. Unlike the Enron case, this one resulted in no major loss of jobs, worker suffering or company collapse.

Nearly all the prosecution witnesses were granted immunity or allowed to plea bargain.

Black is "sort of [a] bad-boy celebrity," said George Tombs, who is writing his second biography about Black, to be published this fall. "This is somebody who's had tremendous power and he's lost it."

Legal troubles for Hollinger International and Black began in mid-2004, when the U.S. Securities and Exchange Commission published a report alleging "racketeering" and "corporate kleptocracy," which led to a $1.25 billion racketeering suit against Hollinger and Black.

That fall, after a U.S. federal judge threw out the racketeering suit, Black resigned as chairman and chief executive officer of Hollinger.

Months later, the SEC filed a civil fraud lawsuit against Black, Hollinger's former deputy chairman and chief operating officer, David Radler, and Hollinger.

"Black, Radler and other top executives didn't understand that investors had handed over their money in order to make more money, not to gain entree to a 'private gentleman's club,'" said Tombs, who added that the defendants "continued operating like they did in the '50s from the old Toronto days, wining, dining and schmoozing."

Federal prosecutors, under the guidance of Fitzgerald, said Black and the other three defendants defrauded shareholders of Hollinger International by collecting "non-compete" payments from the sales of media holdings.

In a non-compete, the seller agrees - in exchange for a payment - not to compete in the buyer's market. The prosecution argued that the payments ended up in the pockets of the defendants, as tax-free bonuses, instead of in the company coffers.

"Why were these men getting paid for non-competes that the buyer never requested?" asked Assistant U.S. Attorney Eric Sussman in his closing statement. "Why were they entitled to take this money and lie about it?"

The defense lawyers said shareholders and company directors had approved the payments.

The prosecution had originally hoped Radler would be their star witness. In exchange for a reduced jail sentence, Radler pleaded guilty in 2005 to fraud and agreed to cooperate with prosecutors.

But near the end of 25 hours of closing arguments, the prosecution changed course and instead labeled him as a "criminal" and "fraudster."

"You do not need to believe a single word David Radler told you to convict each and every one of these defendants," Sussman told the jury.

Tombs described Black as a modern-day Citizen Kane, a man who "had it all and lost it all."

In the early 1990s, Hollinger controlled 60 percent of Canadian newspapers in addition to hundreds of dailies worldwide, including the Chicago Sun-Times, the Montreal Gazette, Britain's Daily Telegraph and the Jerusalem Post.

Tombs said Black reveled in the pageantry of power. In 1999, the British government moved to make him a life peer of the British House of Lords, but Canada does not allow its citizens to carry the title. Black overcame that obstacle in 2001, when he renounced his Canadian citizenship and became Lord Black of Crossharbour, named for the London subway stop near The Daily Telegraph.

-- CNN's Maria Dugandzic and Nick McGurk contributed to this report 

Conrad Black convicted of fraud

Press Association
Friday July 13, 2007 6:13 PM

Fallen media mogul Conrad Black is facing jail after being convicted of fraud and obstruction of justice.

On Friday a Chicago jury found Conrad Black guilty of obstruction of justice and three counts of mail fraud. Black was, however, acquitted of using company funds to subsidise his personal life.







Conrad Black could face up to 35 years in prison having been found guilty of obstruction of justice and three counts of mail fraud. Black was acquitted of using $20 million of company funds to subsidise his personal life despite all the pre-trial speculation about how a jury in blue-collar Chicago would react negatively to his extravagant lifestyle,

Black’s conviction on obstruction of justice was almost inevitable considering the CCTV footage that showed him removing 13 boxes from his office despite a court order not to. The counts of mail fraud related to non-compete agreements which Black and various associates had inserted when selling several of Hollinger’s community newspapers between 1998 and 2001. Much of the money from these agreements—up to $60 million—went, improperly, to Hollinger executives rather than the company itself.

No head of a public company will ever again dare to behave in the publicly ostentatious fashion that Black did. Partly this is because of the new, stricter corporate governance environment that has arisen in the US following the collapse of Enron in 2001 and the subsequent introduction of Sarbanes Oxley in 2002. But the rise of activist shareholders also means that chief executives are now being more forcefully held to account.

We haven’t heard the last from Black, though. He is expected to appeal the verdict

By DAVE CARPENTER  AP Business Writer

CHICAGO (AP) -- Attorneys for Conrad Black assured jurors as his corporate fraud trial opened in March that the case involving the former media tycoon and British lord was not another Enron.

It wasn't. But Enron turned out to be inextricably linked to his downfall.

A federal court jury's convictions of Black and three other former executives of Hollinger International Inc. on Friday signaled the latest in a series of triumphs by government prosecutors in an Enron-inspired crackdown on corporate crime that began five years ago this month. If not for the widespread outrage generated by the Houston energy company's scandal, which left thousands jobless and wiped out billions of dollars in market value and employee pension plans, legal experts say Black and his cohorts likely would have gotten away with their crimes.

"On an order of magnitude, this case doesn't compare to Enron or WorldCom," said Robert Mintz, a former federal prosecutor who represents companies and individuals accused of white-collar crimes. "But ... it's another example of federal prosecutors aggressively pursuing a once-powerful CEO and successfully convincing jurors that his conduct amounted to an intentional fraud."

"That's not an easy thing to do," he said. "Five years ago, that was almost unthinkable."

Amid anger and frustration at scandals from the dot-com era involving Enron, WorldCom, Tyco and other corporations, Washington took two major steps in July 2002 to try to minimize corporate misdeeds.

The White House created a corporate fraud task force to root out and prosecute white-collar criminals - a mission Treasury Secretary Paul O'Neill likened at the time to the work of mob-buster Eliot Ness.

Congress and President Bush then teamed up three weeks later in the toughest crackdown on boardroom fraud since the Depression, setting stringent new standards for all U.S. public company boards, management and public accounting firms in the form of the Sarbanes-Oxley Act.

After five years of catching executives in those nets, the rate of corporate convictions has slowed, due in part to the higher levels of accountability and scrutiny. But prosecutors continue to go after such cases aggressively when evidence surfaces.

"There's no doubt that beginning a few years back - and particularly Enron focused people's attention on it - there's a grave concern with integrity and making sure that corporate fraud is stamped out," U.S. Attorney Patrick Fitzgerald said following the Black convictions.

"They're clearly a priority," he said of corporate crime cases. "And they became more of a priority a few years ago."

At a time when shareholder lawsuits were proliferating, prosecutors got a big assist in the Hollinger case when a special committee of its board responded to angry stockholders by compiling a 500-page report in 2004 detailing how Black conspired with associates to loot the company of millions in bogus fees. The U.S. District Court jury in Chicago was convinced of enough key parts of the scheme to convict Black of three counts of fraud and one of obstruction of justice. The Canadian-born magnate now faces a maximum sentence of 35 years in prison and $1 million in fines, while associates Jack Boultbee, Peter Atkinson and Mark Kipnis could spend up to 15 years in prison with fines of $750,000. "Black got caught up in intensified Justice Department white-collar criminal activity and he suffered from it," said David Ruder, professor emeritus at Northwestern University of Law and a former chair of the Securities and Exchange Commission. "Maybe it wouldn't have gotten to that point," he said, without the accelerated push against corporate crime. Bernard Harcourt, a professor of law at the University of Chicago Law School, said Black's case differs from Enron because it wasn't about him running Hollinger with pervasive, fraudulent behavior. "I would view this more as the greedy CEO who is just trying to stuff his pockets at the end of what was a pretty successful career," he said. Black will be sentenced Nov. 30. However, while he likely won't face terms as long as those of convicted CEOs Jeffrey Skilling of Enron (24 years, 4 months) or Bernard Ebbers of WorldCom (25 years), the verdict showed that Enron's legacy remains alive ."Although the unprecedented wave of major corporate prosecutions has abated, this verdict is further evidence that jurors are still willing to dissect complex allegations and buy into the government's theories that tie the person at the very top of the corporate hierarchy to serious misconduct," said Mintz.

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Prosecutor: Conviction Vindicates the Public

AP Photo/Pat Sullivan


In Conrad Black case, jury unable to reach verdict but keeps trying

CHICAGO: After nine days of deliberations, the jury deciding the criminal case against Conrad Black, the former chairman of the newspaper empire Hollinger International, told a U.S. judge that it could not reach a verdict on all charges in the case against Black and his co-defendants.

So Judge Amy St. Eve sent the jury back Tuesday with instructions to keep deliberating the fate of Black and his former colleagues, who have been on trial for much of the last four months.

Black, 62, has been charged with more than a dozen counts of mail and wire fraud and obstruction of justice in the case, which began with jury selection in mid-March.

He is on trial along with Hollinger's former chief financial officer, John Boultbee; a former vice president, Peter Atkinson; and a former Hollinger lawyer, Mark Kipnis. They are accused of swindling Hollinger shareholders out of more than $60 million. The other three defendants are charged with various counts of mail and tax fraud.

The jurors' note to St. Eve said that they were unable to reach a verdict on all counts in the case.

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The note, which said that the jury had carefully weighed the nearly 80 pages of jury instructions, read: "We have discussed and deliberated on all the evidence and are still unable to reach a unanimous verdict on one or more counts. Please advise."

Lawyers for both sides were summoned to the court and, after consultation, St. Eve ordered the jury to continue the deliberations that began after closing arguments ended June 27.

St. Eve told the panel to make "every reasonable effort" to reach a verdict in the case, which has drawn media attention from across the globe.

Legal experts said it was not unusual for juries in complicated cases, especially those involving detailed financial dealings, to have difficulty reaching a verdict. The judge, in most cases, asks the jury to persevere.

Ronald Safer, a lawyer for Kipnis, argued that the jury should be allowed to return whatever verdict it had reached, even if, in this case, it was a nonverdict. He later said that he was not seeking a mistrial, but was simply asking the judge to allow the jury to return the verdict they saw fit.

Prosecutors told St. Eve on Tuesday that the jury should be granted more time, and that a partial verdict should be allowed.

July 11, 2007