Jul 13, 2007 3:43 pm US/Central
Media Mogul Conrad Black Guilty Of Fraud
CHICAGO (CBS) ―
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Conrad Black owned Hollinger International, the parent company of several newspapers including the Chicago Sun-Times. (File)
A jury has convicted media mogul Conrad Black of mail fraud and obstruction of justice in the alleged looting of his former newspaper chain, reports CBS station WBBM-TV in Chicago.
Jurors found Black, 62, guilty of four counts, 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 other allegations.
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.
Black, a member of the British House of Lords, faced a maximum of 35 years in prison for the offenses the jury convicted him of, plus a maximum penalty of $1 million.
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.
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.
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.
Among other things, Black was accused of using corporate funds to pay for a $62,000 birthday party for his wife.
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.
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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