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Media tycoon Conrad Black convicted of fraud

world Updated: Jul 15, 2007 04:05 IST
Andrew Stern

A US 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 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 defense 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 traveling 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)