Ex-Press Baron Guilty Of Fraud

Jury Finds Black Skimmed Millions From Hollinger

CHICAGO, July 13 -- Former media mogul Conrad M. Black was convicted Friday of swindling the far-flung Hollinger International newspaper empire he once ran out of millions of dollars, becoming the latest in a wave of disgraced corporate executives to face possible prison time for financial fraud.

Black, 62, who once renounced his Canadian citizenship to become a member of the British House of Lords, was found guilty by a federal jury of three counts of mail fraud and one count of obstruction of justice for spiriting documents out of his Toronto office in defiance of a court order.

Black was acquitted on nine other counts ranging from tax fraud to the most serious charge, racketeering. He was also acquitted of fleecing Hollinger shareholders through such perks as taking the corporate jet on a two-week vacation to the island of Bora Bora.

Black, sitting at a table with his lawyers, did not show emotion when the verdict was read. After U.S. District Judge Amy J. St. Eve briefly adjourned the court, Black's wife, Barbara Amiel Black, and his daughter, Alana, leaned over to console him.

The three-month trial drew international attention, heightened by the silver-haired British lord's posh lifestyle and sometimes haughty comments. When shareholders grumbled about the cost of the Bora Bora trip, he wrote a memo saying: "I'm not prepared to re-enact the French revolutionary renunciation of the rights of the nobility."

Black's three co-defendants -- former Hollinger International vice presidents John A. Boultbee, 64, of Vancouver and Peter Y. Atkinson, 60, of Toronto and attorney Mark S. Kipnis, 59, of Chicago -- were found guilty of three counts of mail fraud. They face up to 15 years in prison and fines of up to $750,000.

Prosecutors asked St. Eve to have Black jailed immediately, saying he could face 15 years to nearly 20 years in federal prison for the conviction. But defense lawyers said the actual sentence was likely to be much less.

The jury delivered its verdict on its 12th day of deliberations.

In contrast to the $84 million in fraud prosecutors blamed on Black when he was indicted two years ago, the jurors found him guilty of a fraction of that -- defense attorneys put the amount at $3.5 million.

Still, U.S. Attorney Patrick J. Fitzgerald said the prosecutors were gratified by the verdict. "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 engage in self-dealing, that they not break the law to benefit themselves instead of the shareholders," he said.

St. Eve set a Nov. 30 sentencing date, confiscated Black's passport and ordered him to remain in the Chicago area while she considers the government's request that she revoke his $21 million bond, partly secured by a seaside estate in Palm Beach, Fla.

Edward M. Genson, one of Black's attorneys, argued that Black had "wanted his day in court and now wants his day on appeal" and would not run away.

"He has had his day in court," countered prosecutor Eric H. Sussman, "and now the question is whether he will have his day of sentencing."

Black was stony faced as he handed over the passport. When St. Eve asked if he would appear for sentencing, he said, "Absolutely."

Black avoided reporters' questions as he left the courthouse. Edward L. Greenspan, another attorney for Black, told reporters his client would appeal. "There are viable legal issues. We vehemently disagree with the government's position on sentencing," he said, reading a statement.

Hollinger International, based in Chicago, was at one time one of the world's largest publishers of community newspapers, as well as the Chicago Sun-Times, the Daily Telegraph of London and the Jerusalem Post.

The heart of the case against Black focused on a large-scale sell-off starting in 1998 of Hollinger community papers published across the United States and Canada.

Companies that bought newspapers in seven such deals paid millions of dollars to Hollinger International 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 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 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 noncompete payments also went to a smaller Toronto corporation, Hollinger Inc., which was controlled by Black and in turn owned a controlling interest in Hollinger International.

The government's star witness at the trial was Radler, Black's partner in building the Hollinger empire over three decades. He pleaded guilty to mail fraud and agreed to testify in exchange for a lenient 21-month sentence and a $250,000 fine.

Black had said that he was busy with newspaper interests in Britain and eastern Canada and left most of the sales of community newspapers and noncompete arrangements to Radler. But Radler said that Black was aware of how and why the money was being paid.

Black's lawyers painted Radler as a liar looking for a good deal from prosecutors in his own case.