Conrad Black Co-Defendants Catch Break On Sentencing

By: Mark Fitzgerald Always overshadowed during their fraud trial by their larger-than-life co-defendant Conrad Black, three other former top executives accused of plundering the parent company of the Chicago Sun-Times in the end received sentences that were a shadow of the 78 months of jail time imposed on Lord Black of Crossharbour.

One defendant, Mark Kipnis, the general counsel for the company formerly known as Hollinger International, received no jail time at all.

In documents filed before Monday's sentencing of Kipnis, former Hollinger executive vice president Peter Atkinson, and the company's former CFO, John "Jack" Boultbee, federal prosecutors had asked for prison sentences between 7 and 10 years.

Kipnis, 60, was convicted in July of three counts of fraud in the appropriation of phony non-compete fees from the sale of some community papers by Hollinger's American Publishing Co. subsidiary. Prosecutors said while Kipnis, alone among the four co-defendants, did not receive any non-compete payments, he was equally guilty because he created the paperwork that hid the improper fees from investors and the Securities and Exchange Commission.

But U.S. District Court Judge Amy J. St. Eve later dropped one of those counts, and, on Monday, she declared Kipnis "clearly the least culpable in the scheme."

Kipnis, the only U.S. citizen accused in the Hollinger scandal, was sentenced to five years of probation. He will be subject to six months of electronic home monitoring, and will be required to perform 275 hours of community service.

Unlike his three co-defendants, Kipnis will not be required to pay restitution. The others are sharing in the restitution or forfeiture, with Black assessed $6.1 million, the amount the jury determined was improperly taken by the four.

Peter Atkinson, 60, the number two target of federal prosecutors, also caught a break Monday from St. Eve, who sentenced him to 24 months in prison.

The sentence, which includes a fine of $3,000 and three years probation, was far less than the federal guidelines for his conviction on three counts of fraud.

St. Eve noted that almost immediately after Atkinson discovered that the non-compete fees and other disputed payments had not been approved by Hollinger's board, he repaid the money on Hollinger's terms and cooperated with two internal investigations -- even as a federal grand jury was investigating the looting of the company now known as Sun-Times Media Group.

"This is conduct we want to encourage," St. Eve said.

Atkinson's sentence is even less prison time than the 29 months Black's former lieutenant and Sun-Times Publisher F. David Radler is expected to receive when he is sentenced next month. Radler cooperated with federal prosecutors, pleading guilty to a single count of fraud in exchange for turning star witness against Black and the others.

"Compared to what you took, David Radler took much more," St. Eve told the drawn and stooped Atkinson as he stood before the bench.

Before sentencing, Atkinson portrayed himself as a broken man whose "greatest punishment" is seeing his daughter "dazed and destroyed" by the accusations against and conviction of her father.

Since the scandal emerged in 2003, Atkinson said his life has been one of "crushing anxieties" and "sleepless nights."

"I've lost my career and my reputation," he told St. Eve.

The judge said she believed Atkinson had learned his lesson, and would not be a danger to the public.

"I think you said it best, this has been a downward spiral for you," she said. "I'm not sure why someone as successful with your reputation ended up a convicted felon in the United States, facing prison time.'

Former Hollinger CFO Jack Boultbee, 64, was sentenced to 27 months in prison and three years probation. He was also ordered to pay $152,000 in restitution.