Former media mogul Conrad Black engaged in insider trading and illegally posted information about his former company on a financial message board, all while using the assets of Hollinger International Inc. as his “personal piggy-bank,” according to federal prosecutors.
The allegations, made in a lengthy court filing entered this week in U.S. District Court in Chicago, spell out a dozen misdeeds from the former media baron who is accused of plundering millions of dollars from the company’s coffers.
Prosecutors asked U.S. District Judge Amy St. Eve to include the allegations as evidence in the ongoing fraud and racketeering case against Black.
“Black did not make a distinction between his money and that belonging to a public company,” prosecutors wrote. “It is this mind-set that contributed to his fleecing of International.”
Black, who is scheduled to go to trial in March, also is charged with misusing company money to bankroll his lavish lifestyle and cheating on his taxes. He has pleaded not guilty.
The Associated Press left a message Tuesday with Edward Greenspan, Black’s attorney.
Federal authorities say Black, in 1998, urged a company vice president to respond to a post on a Yahoo message board about Hollinger’s seemingly static stock price.
When the executive, Paul Healy, explained responding would violate federal guidelines from the Securities and Exchange Commission, Black posted a response anonymously, prosecutors said in the filing Monday.
But not before chastising Healy for his hesitation.
“Don’t be so strait-laced,” Black wrote to Healy. “… Get our story out.”
Authorities said Black, along with other officials, used insider trading to boost up Hollinger stock in 1998, arranging for the Canadian company Brascan to buy Hollinger shares at the same time short-sellers were unloading their stock. At the time, Black was a director at Brascan, now called Brookfield Asset Management.
“While Brascan used its own funds to purchase the shares, Black guaranteed their downside and interest rate, and also guaranteed their profit,” prosecutors wrote, saying Black and other executives received cash from the deal.
The Associated Press left a message with a Brookfield spokeswoman.
Among the other allegations, prosecutors say Black:
— deliberately withheld documents from prosecutors.
— spent nearly $9 million of Hollinger’s money to purchase memorabilia from Franklin Delano Roosevelt, without seeking prior approval from the company’s board. The memorabilia, which Black used to pen a 2003 biography of the former president, was stored and displayed at Black’s home.
— abused Hollinger’s charitable donations, attributing the company’s donations to him and his family.
— used company money to pay for handbags, jogging attire, opera-tickets and other personal items for himself and his wife.
Hollinger International’s holdings once included The Daily Telegraph of London, The Jerusalem Post and Canada’s largest newspaper group.
The Chicago Sun-Times is the last remaining major property of the company, now called the Sun-Times Media Group Inc.