Disgraced international press tycoon Conrad M. Black, who stepped down as head of his media empire in 2004 after he and other executives were accused of looting the company, was indicted Thursday on eight counts of wire and mail fraud.
U.S. Attorney Patrick J. Fitzgerald said Black -- who renounced his Canadian citizenship in 2001 to accept a British lordship -- "lived large" off of company shareholders, helping to steal $51.8 million from Hollinger International Inc., which owns the Chicago Sun-Times and once owned the Jerusalem Post, London's Daily Telegraph and hundreds of smaller newspapers in the United States and Canada.
Fitzgerald -- the special prosecutor who brought criminal charges against Vice President Cheney's chief of staff, I. Lewis "Scooter" Libby -- issued an arrest warrant for Black, 61, who faces as much as 40 years in prison and $5 million in fines if convicted on all charges. Fitzgerald said he would seek Black's extradition if he does not turn himself in.
"Officers and directors of publicly traded companies who steer shareholders' money into their pockets should not lie to the board of directors to get permission to do so," Fitzgerald said in a written statement. "The indictment charges that the insiders at Hollinger -- all the way to the top of the corporate ladder -- whose job it was to safeguard the shareholders, made it their job to steal and conceal."
In a written statement, Edward Greenspan, one of Black's lawyers, said: "Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment. It will be shown that he has, at all times, acted within the law. He is confident that, if given a full and fair opportunity to defend himself, he will be found innocent."
Black's representatives declined comment when asked if he would turn himself in to authorities.
The company-funded lifestyle enjoyed by Black and his political columnist wife, Barbara Amiel Black, is notable, even compared with the excesses of other top executives of the era, many since indicted or jailed. The Rigas family, which controlled cable company Adelphia Communications Corp., used company money to build a golf course. Former Tyco International Ltd. chief executive J. Dennis Kozlowski threw elaborate parties at company expense. Former HealthSouth chairman Richard M. Scrushy used company money to buy a Lamborghini, fly friends to the Grammy Awards and promote a band, a shareholder lawsuit claims. Scrushy was acquitted by a jury of criminal fraud charges.
Also indicted Thursday were former Hollinger chief financial officer John A. Boultbee, executive vice president Peter Y. Atkinson and general counsel Mark S. Kipnis, on a total of 11 counts. Prosecutors seek a criminal forfeiture of at least $80 million from the defendants, and Black's ocean-side estate in Palm Beach, Fla.
Kipnis was indicted in August on separate charges, pleaded not guilty and is free on bond. F. David Radler, former publisher of the Sun-Times -- which inflated its circulation figures by as much as 10 percent over six years while he and Black ran the paper, forcing the company to reimburse advertisers at least $27 million -- pleaded guilty to a fraud count in September and is cooperating in the ongoing investigation.
Hollinger Inc., a Canadian holding company previously run by Black, had controlling interest in Hollinger International Inc., which owned the newspapers Black oversaw. Another Black-controlled Canadian holding company -- Ravelston Corp. -- also was indicted yesterday.
A 2004 Hollinger International investigation found that Black and other top company executives pocketed more than $400 million in company money over seven years, reigning over what was called a "corporate kleptocracy" by the company. The report on the investigation said Black and his wife treated the Hollinger corporate jet as a private shuttle between his homes in Toronto, London, New York and Palm Beach, as well as to far-flung vacation spots. The company is suing Black.
The couple took one eight-day round trip to Bora Bora, which cost the company $530,000, the report said. It also said Black charged the company $90,000 to refurbish a Rolls-Royce; $40,000 to throw a birthday party for his wife; and $8 million to buy memorabilia of Franklin D. Roosevelt, about whom Black wrote a book.
When Hollinger International's accountants tried to make Black reimburse the company for his French Polynesian adventure, Black refused, writing in an August 2002 e-mail to co-defendant Atkinson: "Needless to say, no such outcome is acceptable," according to yesterday's indictment.
Robert D. Grant, head of the FBI's Chicago office, said one of the most head-shaking aspects of the case was the way men who were already wealthy "chose to steal with both hands, with a greed almost unfathomable to the average American citizen."
Black sold his New York apartment earlier this year but last month, federal agents seized $8.9 million in proceeds from the sale, saying he had misrepresented its value. Black had claimed it had not risen in value, despite six years of skyrocketing New York real estate prices.
He also has sold his London townhouse, been kicked out of Hollinger Inc.'s offices and is being sued by the SEC, which said Black and Radler diverted $85 million of company money and concealed "self-dealing" transactions from shareholders.
In May, the Lord of Crossharbour's humiliation may have reached its nadir: Hollinger Inc. security cameras caught Black taking boxes of documents from company offices. A judge ordered him to return them.
Ahrens reported from Washington.