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Ex-media mogul Black convicted of fraud
Fallen tycoon is facing maximum of 35 years in prison for offenses
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Ex-media tycoon guilty of fraud, obstruction July 13: A federal jury convicts fallen media mogul Conrad Black of illegally pocketing money that should have gone to stockholders. CNBC |
CHICAGO - Prosecutors told a federal jury a lot about media mogul Conrad Black’s grand lifestyle at the expense of shareholders in the Hollinger International media empire he once ran.
There was the $62,000 birthday party for his wife, with shareholders unknowingly picking up most of the tab. A swanky New York apartment on Park Avenue. And a trip to the island of Bora Bora aboard Hollinger International’s corporate jet.
In the end, jurors ignored the glittering lifestyle and convicted Black on Friday of siphoning millions of dollars out of the corporate till in a series of paper transactions prosecutors called a “bold money grab.”
“We think the verdict vindicates the serious public interest in making sure that when insiders in a corporation deal with money entrusted to them by the shareholders, that they not engage in self-dealing, that they not break the law to benefit themselves instead of the shareholders,” U.S. Attorney Patrick J. Fitzgerald said after the verdict.
Defense attorneys had dreaded all talk of the birthday party for Barbara Amiel Black at New York’s fashionable restaurant La Grenouille.
They feared evidence about the apartment that Black occupied for years at shareholder expense and the vacation junket to Bora Bora in French Polynesia, claiming it appealed to “class prejudice” among the jurors.
But in the end, jurors acquitted Black of those charges as well as nine others ranging from tax fraud to the biggest one — racketeering.
Black, 62, who once renounced his Canadian citizenship to become a member of the British House of Lords, was found guilty of three counts of mail fraud and one count of obstruction of justice for spiriting documents out of his Toronto office in defiance of a court order.
The three-month trial drew international media attention, heightened by the silver-haired British lord’s posh lifestyle and sometimes haughty comments. When shareholders grumbled about the cost of the Bora Bora trip, he wrote a memo saying: “I’m not prepared to re-enact the French revolutionary renunciation of the rights of the nobility.”
Three other former Hollinger executives, John Boultbee, 65, of Victoria, British Columbia; Peter Y. Atkinson, 60, of Oakville, Ontario; and Mark Kipnis, 59, of Northbrook, Ill., were also convicted of fraud charges.
Prosecutors asked Judge Amy St. Eve to jail Black immediately, saying he could face 15 years to nearly 20 years in federal prison on the conviction. Defense attorneys said the sentence was likely to be much less.
In contrast to the $84 million in fraud prosecutors blamed on Black when he was indicted two years ago, the jurors found him guilty of a fraction of that — defense attorneys put the amount at $3.5 million.
St. Eve set a Nov. 30 sentencing date, confiscated Black’s passport and ordered him to remain in the Chicago area while she considers the government’s request that she revoke his $21 million bond, partly secured by a seaside estate in Palm Beach, Fla. A hearing on the bond issue is scheduled for Thursday.
Black defense attorney Edward M. Genson argued that Black had “wanted his day in court and now wants his day on appeal” and would not run away.
Black was stony-faced as he handed over the passport. When St. Eve asked if he would appear for sentencing, he said: “Absolutely.”
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