Business

CBS 2's Mike Parker, Mike Flannery, WBBM 780, and the Associated Press contributed to this report.
CHICAGO (CBS) ― A jury has convicted media mogul Conrad Black of mail fraud and obstruction of justice in the alleged looting of his former newspaper chain.

As CBS 2's Mike Parker reports, jurors found Black, 62, guilty of three counts of mail fraud and one count of concealing documents from an official proceeding, and acquitted him on all the other counts with which he was charged. There had been 13 in total, also including wire fraud and 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. And while the former media mogul was acuitted on the majority of the counts, he still faces serious jail time.

Black faces a maximum of 35 years in prison for the offenses the jury convicted him of, plus a maximum penalty of $1 million. Some observers believe Black's convictions make it likely that he will do some prison time.

Before his trial began, Black told reporters that when his trial was over, he'd be laughing in the faces of those he described as his "persecutors." But he wasn't laughing Friday.

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.

He was notably silent as he left court with his wife, who prefers to be known as "Lady Black."

"This is a message, if you take other people's money, you pay," said U.S. Attorney Patrick Fitzgerald. 'That's not class prejudice, that's proving your case. That was a proper prosecution. I think the defense was proper and the jury did their job."

Black was accused of swindling shareholders in the Hollinger International Inc. newspaper empire out of more than $60 million that should have gone to the shareholders, largely through the sale of hundreds of Hollinger-owned U.S. and Canadian community newspapers.

A federal court jury of nine men and three women delivered their verdict after deliberating 11 days following 14 weeks of testimony at the racketeering and fraud trial.

The jury's guilty verdict on obstruction of justice came after prosecutors showed them a videotape of Black taking documents out of his Toronto office and loading them into his care in defiance of a court order.

"We intend to appeal and there are viable legal issues," said defense attorney Ed Greenspan. We vehemently disagree with the government's position on sentencing."

We know what prosecutors think is appropriate.

"15 1/2 to 20 years," said Fitzgerald.

"He was convicted ot mail fraud and he was convicted ot obstructing and because of those counts coupled with everything else, he's going to get a significant sentence," said CBS 2 legal analyst Irv Miller.

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.

All four men decided to let St. Eve, rather than the jury, handle the issue of how much money they may have to give back in connection with the charges they were convicted of. Prosecutors had been seeking the return of tens of millions of dollars if they had been convicted on all counts.

The trial has captured the attention of reporters from all over the world, given Black's membership in the British House of Lords. He has also been a magnet for the media because of his opulent lifestyle and sometimes-haughty demeanor.

For the dozens of Canadian journalists who came to cover Montreal-native Conrad Black's trial, his conviction on fraud charges is a far bigger story than it is here -- bringing low Canada's most influential media mogul, an outspoken conservative with a unique personal style that was both admired and despised.

"In Canada, this is as big as the OJ Simpson trial was here," said CBC freelancer Susan Berger

"He's a pompous, arrogant character. But he's our pompous, arrogant character," said said Joe Warmington, Toronto Sun columnist.

It has also been watched with interest by Sun-Times employees, since many felt they were personally victimized by the financial machinations that led to the federal fraud charges. The Sun-Times was the center piece of Conrad Black's American newspapers, including dozens he owned in the suburbs around Chicago. While Black and his co-defendants were looting millions of dollars, reporters and editors here were hit by layoffs and penny pinching, even as Black and his co-defendants were looting millions of dollars from his newspaper empire.

"It was just absolute euphoria here," said David Roeder, Sun-Times columnist. "People have been waiting for this a long time. A vindication of the turn around that has been going on already here."

Sun-Times CEO, Cyrus Freidheim Jr., agreed.

"It's been a tough time and that's just a great relief," he said.

Black's conviction appears to reduce the chances for a scenario that has haunted some at the Sun-Times: that Conrad Black might come back and try to regain control of his old newspaper empire.

The case reflected the U.S. government's efforts to crack down harder on corporate malfeasance in recent years, following the Enron, Tyco and WorldCom scandals, and to hold top executives personally accountable for their companies' actions.

In the Hollinger case, millions of dollars were paid in exchange for promises that Hollinger would not come back to the circulation areas of the papers to compete with the new owners. Such "non-compete" payments are common in the newspaper industry but prosecutors say the money belonged to shareholders.

Hollinger did get the bulk of the money, but much of it also went to Black and other executives as well as two Canadian companies he owned.

Hollinger was the parent company of the Chicago Sun-Times and several other papers worldwide including the Toronto-based National Post, The Daily Telegraph of London and Israel's Jerusalem Post. But the Sun-Times is now the only major paper left in the group, what remains of Hollinger has since been renamed the Sun-Times News Group.

Black, Boultbee and Atkinson shared the non-compete payments, which are tax free in Canada. Kipnis is accused of helping to arrange the deals.

Former Gov. Jim Thompson served as chairman of the audit committee at Hollinger. In his testimony at trial, Thompson said he had "skimmed" some documents. That led defense attorneys to say if he believed there was any impropriety, he would have read the documents completely – and attempt to present him as either incompetent or less than candid.

But Thompson told WBBM Newsradio 780 that Black and other Hollinger officials had intentionally never presented some questionable transactions to the audit committee.

"It's pretty clear after all these trials and inquiries that the defendants in this case deceived the audit committee and kept the transactions from the audit committee," Thompson said.

Thompson added that he felt he was betrayed by Black and his associates, and when asked whether Conrad Black was a "crook," he said, "The jury's just found him to be, (and) I trust the jury."

Black's former second-in-command F. David Radler pleaded guilty in the case and cooperated with prosecutors, testifying as the government's star witness.

The jury also saw documentation, including e-mails, that experts say bolster the prosecution's case against Black and his co-defendants.

Black and his co-defendants denied they did anything illegal. Black's attorneys have also urged the jury not to be blinded by the sparkle of Black's wealth and extravagances, claiming the defendants were legally entitled to the money in question.

Black will be back in court for sentencing on November 30. When the judge asked Black is he would appear for sentencing, he said, "absolutely." In the meantime, he remains free on bond, but he cannot leave the country. To guarantee that, the judge ordered Black to surrender his passport.


Key Dates in Conrad Black Case
--1966: Montreal-born Black, the son of a wealthy brewing executive, buys his first newspaper, the Eastern Townships Advertiser in Quebec.

--1971: Establishes the Sterling chain of newspapers in western Canada with business partner David Radler.

--1976: Inherits large stake in the Black family founded Ravelston Corp., whose holdings include part of the Hollinger mining company, ultimately to be a prime vehicle for newspaper acquisitions.

--1985: Acquires control of The Daily Telegraph of London.

--1989: Purchases the Jerusalem Post.

--1993: Hollinger International, the newspaper publishing subsidiary of holding company Hollinger Inc., acquires the Chicago Sun-Times.

--1996: Newspaper empire now near its peak with increased stake in Southam newspaper group, giving him control of more than half of Canada's daily newspapers. Owns over 500 newspapers in Canada, the United States, Britain, Israel and Australia.

--Oct. 30, 2001: Takes seat in British House of Lords as Lord Black of Crossharbour after giving up his Canadian citizenship for the honor.

--May 22, 2003: Agrees to surrender much of his control over Hollinger International at the company's annual meeting to try to placate angry shareholders who say he and other executives should not have collected $73.7 million from non-compete agreements while selling off several newspapers.

--Nov. 17, 2003: Steps down as CEO of Hollinger International after an internal review says $32.15 million in unauthorized payments received by Black and three other company executives were unauthorized.

--Jan. 17, 2004: Hollinger International removes Black as chairman and sues him and David Radler to recover more than $200 million the company claimed was improperly diverted to him, an associate and entities he controlled.

--Feb. 13, 2004: Sues several Hollinger International directors, seeking $650 million for defamation and other charges.

--Feb. 26, 2004: Delaware judge blocks Black's plan to sell control of Hollinger International to the Barclay brothers of Britain, saying Black "persistently and seriously" breached his obligations to his own company.

--Aug. 30, 2004: A special committee of Hollinger International's board files a 500-page report with the Securities and Exchange Commission accusing him of conspiring with associates to loot the company of more than $400 million over seven years while running a "corporate kleptocracy."

--Oct. 1, 2004: Black files billion-dollar defamation lawsuit against the Hollinger special committee.

--Oct. 30, 2004: Hollinger International refiles federal lawsuit against Black and associates, seeking $542 million in damage it says they inflicted on the company.

--Nov. 2, 2004: Resigns as chairman and CEO of Hollinger Inc.

--Nov. 15, 2004: Securities and Exchange Commission files civil fraud lawsuit against Black and Radler, accusing them of improperly diverting tens of millions of dollars from Hollinger International.

--Aug. 18, 2005: Radler and former Hollinger International lawyer Mark Kipnis indicted on federal fraud charges for allegedly diverting $32 million through bogus non-compete fees.

--Sept. 20, 2005: Radler pleads guilty to one count of mail fraud in exchange for an expected reduced sentence of 29 months in prison and a $250,000 fine for cooperating with the investigation.

--Nov. 17, 2005: Black charged in federal fraud indictment along with Jack Boultbee, former Hollinger chief financial officer; Peter Atkinson, former Hollinger vice president and general counsel; Kipnis, who was re-indicted; and Ravelston Corp., a Canadian company Black used to control Hollinger International. All plead not guilty.

--March 5, 2007: Ravelston Corp. pleads guilty to one count of mail fraud and agrees to pay fine of $7 million.

--March 20, 2007: Fraud and racketeering trial begins in court of U.S. District Judge Amy St. Eve.

--July 13, 2007 -- Black convicted of three counts of mail fraud and one count of obstruction of justice. He was acquitted of nine other counts, including racketeering and misuse of corporate perks. Black's three co-defendants were all found guilty of three counts of mail fraud.

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