Media Mogul Conrad Black Found Guilty

Conrad Black, former head of the Hollinger International Inc. newspaper empire, arrives at the federal building in Chicago, Friday, July 13, 2007, where the jury has reached a verdict in his fraud and racketeering trial. (AP Photo/M. Spencer Green)
AP Photo/M. Spencer Green
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, sitting at a table with his attorneys, did not show any emotion when the verdict was read. After U.S. District Judge Amy St. Eve briefly adjourned the court, his wife Barbara Amiel Black and his daughter Alana leaned over to console him.

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.

Black's three co-defendants were all found guilty of three counts of mail fraud. They are former Hollinger International vice presidents John Boultbee, 64, of Vancouver and Peter Y. Atkinson, 60, of Toronto and attorney Mark Kipnis, 59, of Chicago.

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.

During a break in the hearing but after the verdict was read, Edward Greenspan, Black's Canadian defense attorney, was asked how his client was doing. "He's doing OK," Greenspan said.

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.

The original indictment charged that Black and one of his co-defendants fraudulently misused corporate perquisites, including a company jet for a vacation by Black and his wife in the South Pacific, two Park Avenue apartments and company money for a lavish birthday party for Mrs. Black.

According to prosecutors, when Black was asked to reimburse the company for a 10-day vacation to Bora Bora in French Polynesia, he replied: "No such outcome is possible."

Black also charged the company $42,000 for his wife's birthday party five years ago at the La Grenouille restaurant in New York, prosecutors alleged. They said Black agreed to pick up the rest of the tab, about $20,000.

Black also swindled the company in a $3 million Park Avenue apartment sale, prosecutors said.

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.

Radler pleaded guilty to fraud and agreed to testify in exchange for a lenient 29-month sentence. In eight days on the witness stand, he contradicted Black's argument that he knew little about the deals that led to the non-compete payments because he was busy with other matters.

Black's attorneys painted Radler as a liar looking for a good deal from prosecutors in his own case.