Black guilty of fraud, cleared of racketeering

Black guilty of fraud, cleared of racketeering
By Stephanie Kirchgaessner in Chicago
Copyright The Financial Times Limited 2007
Published: July 13 2007 16:57 | Last updated: July 13 2007 23:58


Conrad Black, the British peer who at the height of his power controlled one of the world’s biggest media empires, was on Friday night facing up to 35 years in jail after being convicted of fraud and obstruction of justice.

The Canada-born former publisher of the Telegraph titles in the UK and the Chicago Sun-Times, dressed in a beige linen suit and flanked by his wife Barbara Amiel Black and daughter Alana, sat stonefaced as the verdict was read out. He did not look at his daughter or wife, but passed a note to Lady Black, minutes after he learned of his fate. Lord Black later left the courthouse holding hands with his wife and daughter.

Although he was acquitted on nine of the 13 charges, including the most serious one of racketeering, Lord Black faces a prison sentence and forfeiture of most of his assets, including his home in Palm Beach, Florida, for his part in the theft of millions of dollars from Hollinger International, the company he built and controlled.

Edward Greenspan, Lord Black’s lawyer, said they would appeal, adding: “We vehemently disagree with [prosecution’s estimates for sentencing].”

Lord Black personally stole $2.9m from Hollinger and millions more were directed to the other defendants through a complex scheme in which they were paid “non-competition fees” following a sale of some of the company’s newspaper properties to another company Lord Black controlled.

In another instance, he siphoned hundreds of thousands of dollars from Hollinger in a sham transaction. Lord Black was acquitted of allegations that he stole tens of millions more – possibly because the audit committee signed off on the transactions.

The ruling was reached on the 12th day of deliberations. After the jury was excused during a break in the proceedings, Lady Black huddled around her husband with her step-daughter.

He faces a bail hearing on Thursday after Eric Sussman, chief prosecutor, argued that Lord Black was a flight risk who had a history of flouting the court’s orders.

Lord Black’s three co-defendants – Jack Boultbee, former Hollinger International chief financial officer; Peter Atkinson, former vice-president and general counsel; and Mark Kipnis, a former Hollinger lawyer – were all found guilty of the same mail fraud charges.

Patrick Fitzgerald, the US attorney for the Northern District of Illinois whose office prosecuted the case, said he was ”very satisifed” with the outcome.

He also denied that class had played a role in the jury’s verdict, pointing out that the jurors had acquitted Lord Black on accusations involving “corporate perks”, including his use of company’s corporate jet for a vacation to Bora Bora.