Conrad Black was found guilty on July 13, 2007, and the expatriate Canadian was convicted on three counts of fraud and one count of obstruction of justice. In 2005 Black was charged with stealing billions of dollars from Hollinger International as the major media empire was suddenly and inexplicably melting down. Canadians watched their former favourite publisher, founder of the National Post, enter trial in Mar 07 in Chicago, Illinois.
The U.S. is far sooner to deal out charges in so-called white collar crime than other countries including our own, and when the American government brought charges against Black they included racketeering, mail and tax fraud, money laundering, and obstruction of justice. As the proceedings neared the government alleged he and his cohorts bilked Hollinger Inc. stockholders out of some $80 million.
Proceedings were based on illegal activities around the sales of company holdings, and while he (Black) was ultimately cleared on most charges, to this day he is confronted by numerous lawsuits, most of which are generated against him in Canada. The New York Times said in Jul 07: "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," and many other papers in the Canada, United States, and Australia.
Sentencing on his four convictions was originally set for Nov 21 07 but his lawyers asked for an extension and received a delay until Dec 10 07. He faces a possible prison sentence of 35 years.
As the trial was growing near Black was vocal and dismissive of the charges, calling himself, "an underdog in the crosshairs of the U.S. government, the most powerful institution in the world." Black wrote, "I have never had the slightest doubt of the outcome of a fair trial, knowing that the judgment of the legality of my actions will lie in the hands of 12 American citizens, in one of that country's greatest cities."
At the conclusion of the legal proceedings while the jury deliberated, Black wrote in the Globe and Mail, on Jul 16 07, " I feel like a soldier conscripted for a foreign war. You fight till you win, and then you come home."
Patrick Fitzgerald was the Chicago-based federal prosecutor who said the charges ensued from "the grossest abuse by officers or directors and insiders. ... By lining their pockets they went about a course of conduct where they ... never told the audit committee of the board of directors, or through them the shareholders, what was going on and how they were self-dealing and taking money from the shareholders for themselves."
The meltdown actually began earlier, when in Nov 03, Hollinger's board fired him as CEO. This came when an investigation revealed he and some cohorts had paid themselves millions of dollars without company approval. A short time later, the company filed suit against him in Chicago, seeking $200 million in damages. Hollinger Inc., the Toronto-based parent company of the publishing company, also filed lawsuits.
Conrad Black gave up his Canadian citizenship in 2001 to join the British House of Lords, as Lord Black of Crossharbour. The main problem for Conrad Black, however, may have been an inability to estimate the "severity of the U.S. court system," said Diane Francis, publisher of the Financial Post.
She said while Martha Stewart, and many others are wise enough to recognize their difficulties, "Conrad Black and three of his officers didn't get it. All four have gone down ruinously, thanks to a very sophisticated set of convictions handed down by a Chicago jury." Francis described the convictions as being well-conceived by a thoughtful group of jurors, "The first type of deals involved non-compete 'payments', which were paid to Black and the others, even though the buyers did not request non-compete agreements, much less realize that some of their purchase prices had been set aside as non-compete payments."
These payments, she said, were inflated or, "created because such payments were tax free." She also said, "The other type of transaction that the jury felt constituted fraud was where Lord Black and his co-accused were involved in both sides of the transaction. In other words, this was a form of cynical theft, or self-dealing. As a prosecutor summed it up, 'He was paying himself not to compete against himself.'"
Finally, according to Francis and most other observers of the trial, "the most serious jury finding was that Black obstructed justice," which was based on the video that was repeatedly shown in this country, where Black and his chauffeur took boxes out the back door his Toronto office despite U.S. and Canadian court orders not to do so, and at one moment during these illegal activities he realized himself the film was rolling.
In Nov 07 the Chicago judge denied Black's bid for a new fraud trial, but acquitted his co-defendant Mark Kipnis of one mail fraud conviction. Kipnis and two other co-defendants had also been found guilty of fraud-related charges. Judge Amy St. Eve rejected the appeal because, she, "was satisfied with all of the convictions except for one count of mail fraud against Kipnis."
She said in a 39-page ruling, "The government introduced more than enough evidence to support each defendant's convictions on the mail fraud counts and defendant Black's obstruction of justice conviction" with one exception.
Black, , John Boultbee and Peter Atkinson will be sentenced Dec. 10. Kipnis will be sentenced a week later for his remaining convictions in the trial. David Radler was the main witness against Black and he pleaded guilty in 2005 to one count of fraud, but agreed to a fine of US$250,000 and a 30-month sentence in exchange for testifying against Black.
