(Jonathan Becker/The Times)
The Blacks at their home in Palm Beach, Florida, one of the many residences they owned across the world
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.
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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.
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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
RICHARD SIKLOS
Conrad M. Black, the Canadian-born press baron who cut a glittering swath through financial, political and high-society circles in Toronto, London and New York, was found guilty of fraud yesterday in a Chicago courtroom, along with three of his former employees.
Mr. Black, the former head of Hollinger International, faces as many as 35 years in prison, although the exact sentence determined by Judge Amy St. Eve at a sentencing hearing Nov. 30 is likely to be far shorter.
The verdict represents a remarkable turn in fortune for Mr. Black, the son of a wealthy Canadian businessman and society fixture who once commanded a far-flung media empire that included The Daily Telegraph in London, The Jerusalem Post and The Chicago Sun-Times, as well as scores of other papers in the United States, Canada and Australia.
“We’re gratified by the jury’s verdict,” Patrick Fitzgerald, United States attorney for the Northern District of Illinois, told a news conference.
“We believe the verdict vindicates the serious public interest in making sure that when insiders in a corporation deal with money entrusted to the shareholders, that they’re not engaged in self-dealing, that they not break the law to benefit themselves instead of the shareholders,” he added. Mr. Black, also known as Lord Black of Crossharbour, was found guilty of three counts of mail fraud and a single count of obstruction of justice by the Chicago jury.
He was cleared of nine other counts, largely centered around so-called noncompete agreements in which Mr. Black and others were accused of skimming money from the sale of Hollinger assets under the pretense of being paid not to compete with the new owners.
When the judge read through each of the counts in the verdict, Mr. Black sat stonily but then shot the jury a scathing look. Later, he was consoled by his wife and his daughter, Alana, who had sat in the court to support him throughout the trial.
Mr. Black’s Canadian lawyer, Edward Greenspan, said he intended to appeal, noting that his client was cleared on most of the more serious charges.
“Obviously we’re disappointed — we came here to be acquitted of everything — but we’re not disheartened,” he said. “For the purposes of an appeal, this puts us in a pretty darn good position.”
Mr. Black surrendered his passport yesterday after a bail hearing and was ordered to remain in Chicago until the judge rules on whether to allow him to return to Canada, remain in Chicago or be remanded to custody.
At the bail hearing, the lead prosecutor, Eric Sussman, said he would argue for revoking Mr. Black’s bond, saying he is a flight risk.
During his long, flamboyant career, Mr. Black has alternately charmed and bullied journalists and, along with his wife, the columnist Barbara Amiel, has made social and business connections with powerful, largely politically conservative figures on both sides of the Atlantic.
He populated his board of directors with bold-face names including Henry Kissinger, Richard Perle and Marie-Josée Kravis, and gave black-tie dinners that included Richard M. Nixon, Mr. Kissinger, Ronald Reagan and Margaret Thatcher as guest speakers.
Mr. Black’s trial drew a large contingent of journalists from his native Canada and Britain, and became something of a curiosity in Chicago, a city he had rarely spent time in before his criminal trial but where Hollinger International was based. The company is now called the Sun-Times Media Group.
Charges of various counts of mail and tax fraud were also filed against Hollinger’s former chief financial officer, John A. Boultbee; a former vice president, Peter Y. Atkinson; and a former Hollinger lawyer, Mark S. Kipnis. The three were all found guilty on the same three counts of mail fraud that Mr. Black was — none of them stemming from the more attention-grabbing charges of fraud or the accusations that Mr. Black improperly charged lavish perks to the company.
In the end, Mr. Black and his three colleagues were found guilty of taking illegal payments from the company in two schemes adding up to $6.1 million — a relative trifle in the world of billionaires once inhabited by Mr. Black where, at its peak, his own net worth was estimated at more than $400 million.
Mr. Black and the others, along with F. David Radler, a former business partner, were charged in 2005 with looting Hollinger International of more than $80 million. When the trial began on March 27, the amount was reduced to $60 million, which, Mr. Fitzgerald maintained, was the property of the company.
One of the two schemes that led to convictions involved a subsidiary of Hollinger International paying the defendants for agreeing that they would not compete with that subsidiary, American Publishing Company, for three years if they were to leave the company. At that time, however, American Publishing’s sole asset was a small paper in Mammoth County, Calif., that it was in the process of selling.
“When he paid a noncompete to himself, not to compete with himself — chutzpah comes to mind,” said Herbert A. Denton, a shareholder activist who was involved in Mr. Black’s ouster and is now on the board of Sun-Times Media.
Prosecutors had further charged that the agreements were backdated so that under Canadian laws at the time, they would be tax-free. Lawyers for Mr. Black argued at the trial that these payments were management fees owed him and that no crime was committed.
The second count on which Mr. Black and the others were found guilty involved the sale of small-town newspapers in the fall of 2000 resulting in $600,000 being paid as non-compete agreements. The obstruction of justice charge related to Mr. Black’s removing boxes from his Toronto office ahead of the trial, a sight caught on the office’s security cameras and shown to jurors.
Mr. Black’s downfall began in 2002 when unhappy shareholders began questioning these and other payments made to him, other executives and holding companies he controlled.
After Mr. Black and Mr. Radler were ousted as chief executive and president of Hollinger International in November 2003, Mr. Black asserted that he was a victim of corporate governance “terrorists” who were trying to steal his company.
Mr. Radler at first took a similar stance, but went on to plead guilty to a single fraud count and testify against Mr. Black and the others at the trial in return for the promise of a lenient sentence.
Before and during the trial, Mr. Black adamantly declared his innocence outside the courtroom, sometimes commenting in French and once calling the prosecutors “Nazis.”
Most of Mr. Black’s wealth has been confiscated as part of his ouster from his company. In addition to fines with his prison sentence, he still faces more than $1 billion in civil litigation from the Securities and Exchange Commission and others, and is now on the hook for tens of millions of dollars in legal fees.
At various points, Mr. Black’s lawyers had argued that their client would not get a fair trial because he is a wealthy man and the jury members — nine women and three men — were presumably not.
“The irony is that a ‘jury of his peers’ brought Conrad Black down,” Mr. Denton said. “I’m sure he doesn’t consider those people his peers.”
| Former Cayman Free Press shareholder Conrad Black convicted of fraud |
| Published on Saturday, July 14, 2007 |
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CHICAGO, USA (Bloomberg): Conrad Black, former chief executive officer of Hollinger International Inc., a media empire that reportedly owned a 40 percent interest in Cayman Free Press, was found guilty of defrauding the newspaper publisher, becoming the latest CEO convicted in a five-year US crackdown on corporate crime.  | Deposed media tycoon Conrad Black leaves the Federal Courthouse in Chicago after being found guilty of raiding his company's coffers and bilking shareholders of some 60 million US dollars from the sale of hundreds of newspapers in Canada and the United States.
AFP PHOTO |
Black, 62, was convicted on Friday in Chicago of three fraud charges and obstruction of justice. He was acquitted on nine charges. Three codefendants were convicted of the same three fraud charges as Black. |
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.
Black has a master's degree in history from Montreal's McGill University and a law degree from Laval University in Quebec. He wrote well-reviewed biographies of former US presidents Richard Nixon and Franklin D. Roosevelt.
EDITORIAL
TheStar.com - comment - The downfall of Conrad BlackJul 14, 2007
His legendary smugness shattered by a jury of 12 ordinary Americans, Conrad Black gave them a venomous stare as their findings of guilt on four of the 13 counts against him were read to the court. Convicted on three counts of mail fraud and the more serious charge of obstruction of justice, Black faces a maximum of 35 years in prison, $1 million in penalties, and the forfeiture of millions of dollars in assets. Barring successful appeals on the charges, Black is going to jail.
His co-defendants – Jack Boultbee, Peter Atkinson and Mark Kipnis – were also found guilty of complicity in taking so-called noncompete payments from shareholders to whom the money belonged.
While the case now moves on to forfeiture hearings to determine how much Black and the others will be required to pay back to those they defrauded, to sentencing and possible appeals, business journalists, academics and corporate lawyers will no doubt have a lot to say about the case. Early commentary suggests that Americans and Canadians will bring far different perspectives to the convictions.
For Americans, it is just the latest attempt by the state to restore investor confidence in the stock markets that underpin the U.S. economy after the beating they took in the wake of the scandals at Enron, WorldCom and Tyco.
As one U.S. observer put it, "We've gone through a period where there was not a great deal of government enforcement in white-collar cases. And recently we've seen a great deal more concern by the Department of Justice about white-collar and corporate fraud cases."
For Canadians, however, Black's conviction represents the latest, if not the last, chapter in a saga of a larger-than-life figure who held the country of his birth in contempt. Some will keep searching for reasons why someone who was so rich and powerful would feel the need to pilfer money from minority shareholders in the company he ran. Others will wonder why he even took the chance. On both scores, many will likely blame moral vacuity and plain old greed for Black's descent from international newspaper baron to white-collar criminal.
But underlying almost any explanation for Black's crossing of the criminal line is the tragic character flaw that has been reflected in so much of what he said and did. Black showed an enormous propensity for hubris, the same trait that doomed Macbeth. The biblical proverb "pride goeth before a fall" suggests Black's fate was likewise sealed.
Black's arrogance was reflected in his sesquipedalian language, the contempt in which he held so many people, his lavish lifestyle, and the willing surrender of his Canadian citizenship for a British title. But his downfall ultimately came from his misguided belief that he was entitled to the payments for not competing with newspapers Hollinger International sold off because he saw the widely held public company as nothing more than an extension of himself.
While Black's hubris prevented him from seeing the character trait in himself, ironically, he readily saw it in others, as when he said that he "always felt it was the compulsive element in Napoleon that drew him into greater and greater undertakings, until he was bound to fail."
His own hubris was certainly evident in a 2002 email on the use of corporate aircraft, in which he said, "I'm not prepared to re-enact the French Revolutionary renunciation of the rights of the nobility."
The jury, however, decided that Lord Black's sense of his own nobility did not give him the right to confiscate money from commoners who invested with him.
A Chicago jury has found Conrad Black guilty on three counts of mail fraud and one count of obstruction of justice. The world-renowned media magnate and author is now liable to spend up to 35 years in prison.
To many of his longstanding critics in the media and elsewhere, Friday's verdict will be taken as proof that the man is a quintessential symbol of corporate criminality. Such a simplistic conclusion would do a disservice to an accomplished businessman and intellectual.
Since the fall of Enron in late 2001, the corporate kleptocrat has gained prominence as a stock villain in our popular culture. Billion-dollar corporate scandals have become so numbingly numerous - Tyco, WorldCom, Healthsouth, Qwest, Computer Associates and Adelphia being only the most prominent - that convicted corporate executives now are routinely lumped together as if their misdeeds were identical. But of course, they are not.
While Lord Black has been found guilty of four crimes, he does not deserve to be spoken of in the same breath as, say, WorldCom's Bernie Ebbers, Enron's Andrew Fastow, Jeffrey Skilling and Ken Lay, and Adelphia's John Rigas. These are criminal conspirators who created fraudulent billion-dollar empires, and who impoverished thousands of their ordinary unsuspecting shareholders and employees when the fraud was uncovered. Lord Black did no such thing. Whatever the findings relating to the mail-fraud and obstruction-of-justice charges against him, he did not build imaginary corporate castles in the sky. As many others have noted, he ran a company that was sound and profitable: The corporate do-gooders who came after the man spent far more of the company's money pursuing him than he was ever accused of misappropriating.
All this said, Lord Black has had his day in court. And barring successful appeal, he will be made to pay the price for his crimes. But whatever the man's current travails, it is important that Canadians put his lasting legacy in context. Lord Black delivered to this country a stronger, more vibrant and diverse media market - the National Post being a case a point. With his conviction, the man's critics will have their day. But they should not be permitted to define his place in this country's history.
Media tycoon Conrad Black convicted
Associated Press
Jul. 13, 2007 09:34 AM
CHICAGO - A federal jury convicted fallen media tycoon Conrad Black and three of his former executives at Hollinger International Inc. Friday of illegally pocketing money that should have gone to stockholders.
Black, 62, was convicted of three counts of mail fraud and one count of obstruction of justice. He faces a maximum of 35 years in prison for the offenses, plus a maximum penalty of $1 million.
He was acquitted of nine other counts, including racketeering and misuse of corporate perks, such as taking the company plane on a vacation to Bora Bora and billing shareholders $40,000 for his wife's birthday party.
Black, sitting at a table with his attorneys, did not show any emotion when the verdict was read. After U.S. District Judge Amy St. Eve briefly adjourned the court, his wife, Barbara Amiel Black, and his daughter, Alana, leaned over to console him.
While the verdict was mixed, the conviction signaled an increasing trend of aggressive U.S. government pursuit of senior corporate executives, following the Enron, Tyco and WorldCom scandals, and to hold top executives personally accountable for their companies' actions.
Black's three co-defendants were all found guilty of three counts of mail fraud. They are former Hollinger International vice presidents John Boultbee, 64, of Vancouver and 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.
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 at the company whose name has been changed to Sun-Times News Group.
The heart of the case against the husky, silver-haired publishing millionaire focused on a large-scale selloff starting in 1998 of Hollinger community papers that were published across the United States and Canada.
Companies that bought newspapers in seven such deals paid millions of dollars to Hollinger International, with headquarters in Chicago, in return for promises it would not go into competition with the new owners.
Black was charged with illegally diverting millions of dollars in those so-called non-compete payments to himself, Boultbee, Atkinson and the longtime No. 2 man in the Hollinger International empire, F. David Radler.
Black was convicted on three counts of those allegations made by prosecutors. The obstruction of justice charge was considered the most likely of all to net a conviction because Black was captured on videotape removing 13 boxes of documents from his Toronto offices, despite a court ban on taking away potential evidence.
Some of the non-compete payments also went to a smaller Toronto corporation, Hollinger Inc., which was controlled by Black and in turn owned a controlling interest in the Chicago-based Hollinger International.
Radler pleaded guilty to fraud and agreed to testify in exchange for a lenient 29-month sentence. In eight days on the witness stand, he contradicted Black's argument that he knew little about the deals that led to the non-compete payments because he was busy with other matters.
Black's attorneys painted Radler as a liar looking for a good deal from prosecutors in his own case.
Conrad Black May Be Sorry He Gave Up Cdn. Citizenship
Friday July 13, 2007
CityNews.ca Staff
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.
Voices: Conrad Black guilty verdictJul 13, 2007 01:07 PM
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.
By Katy Byron and Zak Sos, CNN
July 13 2007: 5:55 PM EDT
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| Conrad Black |
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.
Lord Black of Crossharbour was found guilty of three counts of fraud and one of obstruction by a jury at the Dirksen Federal Courthouse in Chicago, Illinois.
Black was accused with other Hollinger International executives of stealing 60 million dollars (£30 million) from the company's shareholders. Prosecutors alleged that that they behaved like bank robbers secretly swindling the shareholders out of their money.
After the verdicts were delivered to a packed courtroom, prosecutor Eric Sussman called for him to be jailed, declaring that "very conservatively" Black was looking at a sentence of 15 to 20 years.
The jury heard details of Lord Black's lavish lifestyle, which the prosecution claimed was partly funded through fraud.
The panel finally delivered verdicts on the 62-year-old former Daily Telegraph owner and once-powerful chief executive of the Hollinger newspaper empire on the 12th day of deliberations. Black, who launched an immediate appeal, was convicted of three counts of fraud but cleared of a further six. The nine women and three men on the jury also cleared him of charges of racketeering and tax evasion.
The jury had to consider 42 counts against Black and his three co-defendants in a highly complex trial. They had heard the prosecution allege that the 60 million dollars mainly came from the sale of hundreds of Hollinger-owned US and Canadian regional newspapers between 1998 and 2001, in which the buyers paid large sums in return for agreements that Hollinger would not compete with the new owners.
Black, of Toronto, Ontario, Canada, faced nine counts of mail and wire fraud, two counts of tax evasion and one count each of racketeering and obstruction of justice. The billionaire was accused, amongst other things, of cheating Hollinger International by taking the company plane on a holiday to Bora Bora in French Polynesia and billing shareholders 40,000 dollars (£20,000) for his wife's surprise birthday party. He was cleared of the charges relating to these allegations.
Black was convicted of mail fraud - fraud involving the postal service - but cleared of wire fraud - fraud involving any form electronic communication. He could face a maximum sentence of five years for each fraud count and 20 years for obstruction of justice, as well as a huge fine.
Black's three co-defendants were all found guilty of three counts of mail fraud. They are former Hollinger International vice presidents John Boultbee, 64, of Vancouver, and Peter Atkinson, 60, of Toronto, and attorney Mark Kipnis, 59, of Chicago.
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)
FACTBOX-Key facts about Conrad Black
Conrad Black arrives with his wife Barbara Amiel Black at the Dirksen Federal courthouse for a verdict in his trial in Chicago, July 13, 2007. A U.S. jury on Friday found former media mogul Black guilty of multiple counts of criminal fraud and a single count of obstruction of justice but acquitted him of racketeering and tax charges. REUTERS/Stephen J. Carrera
Conrad Black arrives with his wife Barbara Amiel Black at the Dirksen Federal courthouse for a verdict in his trial in Chicago, July 13, 2007. Former media mogul Black is guilty of criminal fraud and obstruction of justice but innocent of racketeering, a U.S. jury found on Friday. REUTERS/Stephen J. Carrera
Conrad Black arrives at the Dirksen Federal courthouse in Chicago, July 13, 2007. Former media mogul Black is guilty of criminal fraud and obstruction of justice but innocent of racketeering, a U.S. jury found on Friday. REUTERS/John Gress
Conrad Black arrives with his wife Barbara Amiel Black at the Dirksen Federal courthouse for a verdict in his trial in Chicago, July 13, 2007. A U.S. jury on Friday found former media mogul Black guilty of multiple counts of criminal fraud and a single count of obstruction of justice but acquitted him of racketeering and tax charges. REUTERS/Stephen J. Carrera
Rodney Adler - Sunday, 17 April 2005
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