Government confirms criminal investigation into Hollinger Inc.

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Government confirms criminal investigation into Hollinger Inc.

Eds: SUBS graf 5, Releasing that, to UPDATE with court hearing held over. Picks up graf 6, 'Jim Badenhausen ...'

By MAURA KELLY LANNAN

Associated Press Writer

CHICAGO (AP) -- Federal prosecutors are conducting a fraud investigation into Hollinger Inc., newspaper tycoon Conrad Black and his former top deputy, David Radler.

The government acknowledged the criminal investigation for the first time Tuesday in court papers in which it asked to intervene in a U.S. Securities and Exchange Commission lawsuit filed in November against Hollinger Inc., Black and Radler.

The SEC alleges the men engaged in a "fraudulent and deceptive scheme" to take cash and other assets from Chicago-based Hollinger International, the parent company of the Chicago Sun-Times, and conceal the actions from shareholders. Hollinger Inc. is the Toronto-based holding company that has voting control over Hollinger International.

The government asked to delay until Aug. 1 the release of a document that the defendants requested from the SEC "to protect the integrity of the related criminal investigation."