By: E&P Staff
Conrad Black’s bankrupt Canadian holding company Ravelston Corp. Ltd. has decided to enter a plea of not guilty in a Chicago court to charges it participated in a scheme to pilfer $32 million from Hollinger International Inc., publisher of the Chicago Sun-Times.
The development, reported Thursday in Canadian newspapers, breaks a legal stand-off between the U.S. Attorney in Chicago, which his prosecuting the fraud case, and RSM Richter Inc., the firm appointed by an Ontario court as receiver for Ravelston.
The U.S. attorney threatened to treat Ravelston as a “fugitive to justice” if it refuse to enter a plea. Former Chicago Sun-Times Publisher F. David Radler pleaded guilty Sept. 20 to a single count of fraud in a plea agreement that would give him a reduced prison sentence of 29 months in exchange for testifying in the continuing investigation into alleged fraud by Hollinger executives, including its former chairman, Conrad Black. A third co-defendant, former Hollinger General Counsel Mark Kipnis, has pleaded not guilty to the seven counts of fraud.
Ravelston’s receiver had been hesitating to enter a plea, fearing it might jeopardize Ravelston’s efforts to defend itself in several U.S. civil lawsuit, and because an appearance might open it up to further U.S. criminal charges — including a RICO (Racketeering Influenced Corrupt Organization) charge.
But in a report to Ontario Superior Court, Richter recommended Ravelston recognize the U.S. court and enter a not guilty plea. Richter said the move was supported by two Ravelston stakeholders, Chicago-based Hollinger International and Hollinger Inc., a Toronto-based holding company whose major asset is a 68% voting stake in Hollinger International.
A hearing on the recommendation, which must be approved by the Ontario court, was scheduled for next week.