International media mogul Conrad Black convicted of fraud

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Friday, July 13, 2007

International media mogul Conrad Black has been found guilty by the US District Court for the Northern District of Illinois in Chicago, Illinois on three charges of mail fraud and one of obstruction of justice. However, the jury did clear him of the rest of the charges. Black faces a maximum of 35 years in prison and a US$1 million fine at his sentencing, which is scheduled for November.

Cquote1.svg 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 Cquote2.svg

—U.S. Attorney Patrick Fitzgerald

He was found not guilty of nine other charges including racketeering, misuse of corporate perks and tax evasion. The 13 charges were based on allegations that Black defrauded investors in his company, Chicago-based Hollinger International (now known as Sun-Times Media Group). He was accused of stealing around US$60 million from the company.

David Radler, who was the second-highest ranking officer at Hollinger at the time of the crimes, testified against Black, after admitting fraud himself. Radler testified before the court and jury, that Conrad Black had concocted a scheme where executives of Hollinger could pocket payments when selling small local newspapers that Hollinger owned, in exchange for non-compete agreements.

Black's three co-defendants and former associates (Jack Boultbee, Peter Atkinson and Mark Kipnis) were all found guilty of several counts of mail fraud.

Cquote1.svg We intend to appeal and there are viable legal issues. We vehemently disagree with the government's position on sentencing. Cquote2.svg

—Edward Greenspan, attorney for Conrad Black

"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 engage in self-dealing, that they not break the law to benefit themselves instead of the shareholders," said U.S. Attorney Patrick Fitzgerald, who prosecuted the case.

"We intend to appeal and there are viable legal issues. We vehemently disagree with the government's position on sentencing," said Edward Greenspan, Conrad Black's attorney. "We believe, based on the conviction of the charges here, that the sentences for this type of offence are far less than what the government suggested."

"It only takes one fraud charge and the man is disgraced and finished," said Joshua Rozenberg, legal editor of Daily Telegraph, which was once owned by Hollinger International. "He is clearly facing a lengthy prison sentence."

Black was released, pending his appeal, on a US$20 million bond. He agreed to remain in the Chicago area for at least one week. Judge Amy St. Eve confiscated his passport.

Conrad Black renounced his Canadian citizenship in 2001, to become a life peer as Baron Black of Crossharbour. He is technically a United Kingdom citizen, as he is a British Lord. Even without his Canadian citizenship, Black continues to enjoy the privileges of membership in the Queen's Privy Council for Canada which Brian Mulroney gave him in 1992 which includes the use of a special diplomatic passport.

Sources

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