Black Guilty of Fraud, Acquitted of Racketeering

By: Fallen media tycoon Conrad Black was convicted Friday of mail fraud and obstruction of justice, but a jury acquitted him of wire fraud, racketeering and several other counts.

Black, the former head of the Hollinger International Inc. newspaper empire, had been accused of swindling shareholders out of millions of dollars.

A federal court jury of nine men and three women delivered their verdict after deliberating 11 days following 14 weeks of testimony at the racketeering and fraud trial.

Black, 62, a member of the British House of Lords, faced a maximum of 35 years in prison for the offenses the jury convicted him of, plus a maximum penalty of $1 million.

The case reflected the U.S. government's efforts to crack down harder on corporate malfeasance in recent years, following the Enron, Tyco and WorldCom scandals, and to hold top executives personally accountable for their companies' actions.

Hollinger International once owned community papers across the United States and Canada as well as the Chicago Sun-Times, the Toronto-based National Post, The Daily Telegraph of London and Israel's Jerusalem Post. The Sun-Times is the only large paper remaining and the name of the company has been changed to Sun-Times News Group.

Prosecutors accused Black of billing shareholders $42,000 for his wife's birthday party at New York's restaurant La Grenouille, swindling the company in a $3 million Park Avenue apartment sale and taking the corporate jet on a two-week vacation to Bora Bora in French Polynesia. Black's attorneys said the bills were justified business expenses and that he paid his fair share in the apartment deal.

But the heart of the case against the husky, silver-haired publishing millionaire focused on a large-scale selloff starting in 1998 of Hollinger community papers that were published across the United States and Canada.

Companies that bought newspapers in seven such deals paid millions of dollars to Hollinger International, with headquarters in Chicago, 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 so-called non-compete payments to himself, Boultbee, Atkinson and the longtime No.2 man in the Hollinger International empire, F. David Radler.

Some of the non-compete payments also went to a smaller Toronto corporation, Hollinger Inc., which was controlled by Black and in turn owned a controlling interest in the Chicago-based Hollinger International.


No comments on this item Please log in to comment by clicking here