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 Posted: Mon Mar 05, 2007 2:32 pm Post subject: U.S. Wire Fraud and media baron Conrad Black |
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Pasquantino paves the way:
Black's media empire, including Cdn taxes, now subject to U.S. wire fraud charges
Headlines worldwide blazed this summer with more news of financial scandals plaguing Canadian media maven Lord Conrad Black. Here is an excerpt from the excellent BBC Online story, Hollinger men face fraud charges , of Aug. 18/05:
| Quote: | Two former officials from Conrad Black's media empire have been charged with allegedly diverting $32m (£17m) through bogus newspaper deals.
David Radler, ex-president of Hollinger International and Hollinger's in-house lawyer Mark Kipnis face seven counts of fraud.
The two were indicted together with Conrad Black's bankrupt holding company Ravelston Corporation.
Disgraced tycoon Conrad Black was not accused of any wrongdoing.
The indictment alleged that the men diverted the money through a series of secret deals disguising the cash as non-compete fees associated with the sale of newspaper publishing groups. |
What about the allegedly unpaid Canadian taxes?:
Yes, now that the common-law revenue rule has been overturned by the U.S. Supreme Court, even these could be subject to U.S. prosecution. See Radler charged with fraud by Richard Blackwell at the Globe and Mail.com Aug. 19/05:
| Quote: | | The U.S. prosecutors allege that millions were diverted into the pockets of executives through fraudulent "non-competition" payments that were generated when U.S. newspapers were sold. These payments, which became "more brazen and bold over time," cheated Hollinger's public shareholders and Canadian tax authorities (emphasis ours), and were hidden from the Hollinger board, the prosecutors allege. |
Raddles to plead guilty to fraud and co-operate with Black investigation
See the update Black executive Radler to plead guilty, from CBC News on Aug. 24/05 from which the following paragraphs are taken:
| Quote: | The lawyer for David Radler said Wednesday the former Hollinger executive will plead guilty to fraud charges. Radler was president and chief operating officer of Hollinger International Inc. and a one-time lieutenant to newspaper baron Conrad Black.
Radler was indicted Aug. 18 on five counts of mail fraud and two counts of wire fraud. He has been accused of cheating shareholders in Canada and United States, as well as Canadian tax authorities. He is to appear in U.S. District Court in Chicago on Sept. 15 to enter a guilty plea.
Radler's lawyer, Anton Valukas, declined to comment on the growing speculation that his client may testify against Black.
According to prosecutors, Radler faces up to 35 years in prison if convicted on all seven counts of fraud.
Black and Radler are also facing numerous civil suits accusing them of cheating investors.
Also Wednesday, Hollinger's in-house attorney Mark Kipnis pleaded not guilty to the same seven-count fraud charge. Kipnis was ordered to surrender his passport to U.S. authorities and released on his own recognizance. |
Enron revisited:
Former Hollinger exec Radler indicted for fraud, a story Aug. 19/05 by CTV.ca observed an interesting parallel between this investigation and recent Enron and WorldCom scandals:
| Quote: | Experts say prosecutors could be setting up Radler to do to Black what Sullivan did to Ebbers.
Civil fraud charges were launched against Black and Radler in November by the U.S. Securities and Exchange Commission. It accuses the two men of using Hollinger International as "their personal piggy bank." Those allegations haven't been proven in court.
At the end of July, the U.S. Attorney's office filed court documents saying "the government's criminal investigation of the SEC defendants is progressing with all due diligence."
The U.S. Attorney's office asked a U.S. federal court judge to delay for two months the disclosure of a secret document in part to avoid impairing the government's ongoing criminal investigation.
The Attorney's office asked that the document be kept secret until Oct. 1.
U.S. prosecutors have said they are investigating Black and Radler on allegations of conspiracy, mail fraud, wire fraud and interstate transportation of funds obtained by fraud.
Prosecutors have said in court documents that charges might be filed under the U.S. Racketeer Influenced and Corrupt Organizations Act, known as RICO. |
Hasn't a federal judge already dismissed RICO charges in this case?
Yes, last fall, but that didn't end the matter. See Judge dismisses Hollinger case at BBC Online Oct. 8/04:
| Quote: | A US federal judge has dismissed a $1.25bn racketeering lawsuit brought against ex-newspaper tycoon Conrad Black by Hollinger International.
...Hollinger International's racketeering charge against Lord Black centred around the accusation that he and other former directors had pocketed millions of dollars in non-competition fees and other payments after they allegedly sold newspapers for less than their market value.
...Rather than throwing out the charges because of any lack of substance either for or against, Judge Manning instead said in her ruling that the allegations should be dealt with under securities law, not anti-racketeering statutes (emphasis ours).
Under US anti-racketeering law it was possible for Hollinger International to seek in damages triple the amount it alleged Lord Black to have stolen - $380.6m. Hence the $1.25bn figure.
"This court is not making any determination as to the validity of the fraudulent actions underlying these claims," said Judge (Blanche) Manning. |
We will continue to follow U.S. wire fraud prosecutions, which may one day pertain to the I-gaming industry worldwide. Look for updates to the Black investigation after Oct. 1/05, when the court is to release a key document.
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| Posted: Mon Mar 05, 2007 2:34 pm Post subject: |
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Black indictment alleges breach of fiduciary duty and wire fraud:
View the indictment here.
View the Dec. 3/05 update, Conrad Black pleads not guilty to fraud charges, in the Economic Times online. Here's an excerpt from the second half:
| Quote: | Mr Black’s arraignment was postponed twice and US prosecutors were ready with arrest warrants and planned to launch extradition proceedings if needed. But the combative Mr Black, who renounced his Canadian citizenship to accept a British lordship as owner of The Daily Telegraph, appeared Thursday in court in Chicago. The judge ordered that Black be released on a $20m bond.
Mr Black, formally Lord Black of Crossharbour in the UK, is represented in the case by well-known Chicago defence attorneys Edward Genson and Marc Martin. Mr Black’s Canadian associate Peter Atkinson, 58, also pleaded not guilty on Thursday to the indictment. He was Hollinger’s executive vice president and oversaw legal affairs for the company. His bond was set at $1.5m. John A “Jack” Boultbee, 62, the company’s former CFO, did not appear for his scheduled arraignment on Wednesday.
Former Hollinger attorney Mark Kipnis, pleaded not guilty a day earlier.
Black faces a maximum of 40 years in prison if convicted on all eight counts. A trial isn’t expected to start for at least six months.
The indictment charged that he and his associates looted the company through a series of fraudulent payments linked to Hollinger International’s sale of several hundred US and Canadian publishing properties. Hollinger owns the Chicago Sun-Times and other publications in North America and formerly controlled The Daily Telegraph of London and the Jerusalem Post.
The star witness in the case is expected to be former Sun-Times publisher David Radler, who pleaded guilty in September to charges of taking part in a scheme to siphon off $32m in proceeds from the sale of newspaper properties in the US and Canada through bogus contracts with purchasers.
Radler, Black’s top deputy and longtime business partner, agreed to cooperate with the government. |
We never liked his publications when he ran them - but fraud?
Here is the legal hurdle Illinois District Attorney Patrick Fitzgerald faces at Lord Black's trial by jury now scheduled in March, 2007:
| Quote: | 948 Intent to Defraud
The government must prove that the defendant had the specific intent to defraud. See United States v. Diggs, 613 F.2d 988, 997 (D.C. Cir. 1979) ("Because only 'a scheme to defraud' and not actual fraud is required, proof of fraudulent intent is critical."), cert. denied, 446 U.S. 982 (1980); see also United States v. Costanzo, 4 F.3d 658, 664 (8th Cir. 1993) (intent is an essential element, inquiry is whether defendants intended to defraud); United States v. Porcelli, 865 F.2d 1352, 1358 (2d Cir.) (specific intent requires intent to defraud, not intent to violate the statute), cert. denied, 493 U.S. 810 (1989); cf. United States v. Reid, 533 F.2d 1255, 1264 n. 34 (D.C. Cir. 1976) ("Proof that someone was actually defrauded is unnecessary simply because the critical element in a 'scheme to defraud' is 'fraudulent intent,' Durland v. United States, 161 U.S. 306 . . . (1896), and therefore the accused need not have succeeded in his scheme to be guilty of the crime."); United States v. Bailey, 859 F.2d 1265, 1273 (7th Cir. 1988) (court held that there must be sufficient evidence that the defendant acted with intent to defraud, that is, "willful participation in [the] scheme with knowledge of its fraudulent nature and with intent that these illicit objectives be achieved." (quoting United States v. Price, 623 F.2d 587, 591 (9th Cir. 1980), cert. denied, 449 U.S. 1016 (1980), overruled on other grounds by, United States v. DeBright, 730 F.2d 1255 (9th Cir. 1984)), cert denied, 488 U.S. 1010 (1989). (From the excellent U.S. Dept. of Justice Criminal Procedure Manual, October, 1997) |
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| Posted: Mon Mar 05, 2007 2:35 pm Post subject: |
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Dull and duller:
Two biopics on Black and Amiel to air on Canuck TV
For more on the upcoming docu-drama, Shades of Black, based on Richard Siklos's biography of the same title, see Jason Priestley co-stars in movie chronicling rise and fall of Conrad Black -- Albert Schultz and Lara Flynn Boyle are Conrad and Barbara, a CTV.ca news story of Sept. 30/05.
Shades of Black
Hardcover
By Richard Siklos
Here is our favorite portion of the excerpt published at globeandmail.com on Nov. 5/04:
| Quote: | | Black's hand-selected Hollinger board was stocked with — in addition to his wife, the columnist Barbara Amiel — a high ratio of dignitaries of the right, including former U.S. secretary of state Henry Kissinger, former Defense Policy Board chairman Richard Perle, four-term Illinois governor James Thompson, and retired U.S. ambassadors Richard Burt and Raymond Seitz. Their elevated stature refflected Black's carefully cultivated persona as a Renaissance magnate, equally adept at delivering euphuistic speeches in Britain's House of Lords, penning weighty biographies, and overseeing a cash-spinning media empire. He and Kissinger, whom he'd known for two decades, were especially close. Indeed, Conrad and Barbara had spent the last American Thanksgiving at Henry and Nancy Kissinger's home in Connecticut. "I realize the allegation is about that I am somewhat of a seeker of celebrities, and in one sense I suppose that's true," Black once said. "But my purpose is that celebrities who are justly celebrated can be very useful to you." |
CBC is also planning its own TV movie about Lady Barbara Amiel Black, whose claim to journalistic distinction is based on a series of lightweight opinion pieces with occasional right-wing jabs at liberal strongholds, such as public health care and public ownership of resources, which rarely hit the mark. It's a claim, in our view, as iffy as her taste in husbands. See the story of Dec. 8/05 by Patricia Best at globeadvisor.com, Movie moguls star in real-life spy adventure: A View to Amiel.
Better still, read the excerpt from Peter C. Newman's assessment of Nov. 8/04, Barbara's World, at Macleans.ca:
| Quote: | | In a Sunday Times column published after she married Conrad, Barbara had written: "My husband is very rich, but I am not. I don't regard my husband's money as my own. Having married very wealthy men before my current husband, I can guarantee that I parted from them leaving both their fortunes and my opinions intact. I have been a bitch all my life and did not need the authority of money to be one. My detractors were calling me a 'fascist bitch' long before I had a penny. I am a north London Jew who has read a bit of history. That means I know this: in a century that has seen the collapse of the Austro-Hungarian, British and Soviet empires, reversal of fortune is this rich bitch's reality. One might as well keep working and have the family's Vuitton suitcases packed." |
Here Be Dragons
Hardcover
By Peter C. Newman
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| Posted: Mon Mar 05, 2007 2:37 pm Post subject: |
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Connie fights back!
See the CTV.ca story of Jan. 18/06, Newman issues 'statement of regret' over Black.
Here is an excerpt:
| Quote: | Peter C. Newman and former media baron Conrad Black have reached an out-of-court deal on a $2.1-million libel suit that Black served on the controversial author last year. The deal saw Newman issue a statement of regret Tuesday for comments he made about Black in a 2004 memoir: Here Be Dragons: Telling Tales of People, Passion and Power. Newman's lawyer said the deal means Black will officially drop the libel lawsuit he served in Toronto last November.
"There was an agreement that upon issuing the statement ... the action by Conrad Black would be dismissed," said Howard Winkler in a statement. Winkler said he expects to hear from Black's lawyers in the coming days to formally conclude the deal and obtain a release clearing future publication of the book.
According to Black's statement of claim, the disgraced newspaper magnate says he is libelled by a passage in Newman's book that alleges that he broke criminal laws. None of the allegations contained in the passage about Black have been proven in court and the statement issued for Newman by his legal team notes that Black denies these allegations and believes he will be vindicated. |
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| Posted: Mon Mar 05, 2007 2:38 pm Post subject: |
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Yes, and get this:
The Globe and Mail
Black takes aim at U.S. Justice Department
over cash seizure
By Paul Waldie
May 26/06
p. B3
| Quote: | Conrad Black has another beef with the U.S. Department of Justice, this time over its seizure of more than $1-million (U.S.) that Lord Black planned to use to pay a variety of taxes and real estate fees.
The spat is the latest tussle over the sale of Lord Black's New York apartment last October to developer Martin Berman for $10.5-million.
Just as the sale was about to close, FBI agents swooped in and seized roughly $8.9-million, the amount that was supposed to go to Lord Black net of taxes and other fees. That money is now being held as part of the bail conditions for Lord Black in the criminal case involving allegations of fraud at Hollinger International Inc. Lord Black has pleaded not guilty, and none of the allegations have been proven.
...Lord Black argued in the filing that the FBI went too far and acted "improperly or maliciously." The police action "is especially troubling because in seeking a seizure warrant, the government stated that it would seize only the net proceeds to Mr. Black, and not the portions of the funds that were being held by [Lord Black's lawyers] for the benefit of third parties such as Sotheby's," the filing said.
It said that the Department of Justice released some of the seized funds to pay federal taxes related to the sale, but has "inexplicably" hung on to the rest. (emphasis added) |
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| Posted: Mon Mar 05, 2007 2:40 pm Post subject: |
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See the globeandmail.com story of May 29/06, Black's name surfaces in letter, by Paul Waldie and Sinclair Stewart.
Here is an excerpt:
| Quote: | Conrad Black, who is facing several criminal charges and civil legal battles, has now had his name surface in a British newspaper in connection with its report into an investigation by British police into allegations the government rewarded political contributors with appointments to the House of Lords.
Scotland Yard has asked for information about Lord Black as part of its probe into the "cash for peerages" affair, according to an Observer report yesterday. The information surfaced in a letter sent recently by Conservative Party chairman Francis Maude to former party officials asking for background information in connection with the investigation. The Observer reported that it was told by a source who read the letter that Lord Black was the only peer mentioned in it.
...Yesterday, Edward Greenspan, Lord Black's Toronto-based lawyer, said he was unaware of the investigation. "We don't know anything about it," he said. |
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| Posted: Mon Mar 05, 2007 2:42 pm Post subject: |
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Vancouver Sun
Lamentable daily real estate ad flier
Conrad Black sued again
Hollinger Inc. seeks $750-million for
'overwhelming abuse'
By Theresa Tedesco
July 7/06
p. F1
| Quote: | TORONTO - Conrad Black, his wife and several former business associates have been named by Hollinger Inc., a holding company through which he once controlled his media empier, in a lawsuit seeking about $750 million in damages as a result of "overwhelming abuse" dating back to the 1990s.
The lawsuit filed Thursday - the latest in at least a dozen multi-million-dollar civil and criminal proceedings since 2004 in the United States and Canada against Hollinger's former chairman and chief executive - accuses Black and the others of a long list of misdeeds, including breach of contract and fiduciary duty, conspiracy, negligence, misappropriation of funds, and unjust enrichment.
The Toronto-based company's new management and board of directors claim that the previous board, led by Black, engineered the transfer of some of the holding company's most prized assets, namely London's Daily Telegraph, to its U.S. subsidiary at rock-bottom prices. That drove down the value of the Canadian company, harming its public shareholders, the lawsuit alleged.
...The 48-page claim, filed in Ontario Superior Court, alleged that "misconduct undermined the public's confidence" and resulted in a "plethora of civil, criminal and regulatory proceedings" against the company.
Edward Greenspan, a prominent Canadian criminal lawyer representing Lord Black, called Hollinger Inc.'s claims "absurd." He said he had not yet been served with the legal papers, "but when we do receive the lawsuit, we will review it and vigorously defend against the accusations," he said yesterday.
In addition to Lord Black, who was stripped of his corporate title and removed from Hollinger Inc.'s board of directors, the lawsuit named Barbara Amiel Black, and the company's former executives David Radler, John Boultbee and Peter Atkinson and Ravelston Corp., a private company controlled by the former press baron that is now in receivership and under court bankruptcy protection. |
See also Hollinger Inc. Launches Claim In Ontario Superior Court Against Ravelston And Related Parties, Hollinger, Inc.'s press release of July 6/06. |
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| Posted: Mon Mar 05, 2007 2:43 pm Post subject: |
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Vanity Fair
Magazine Subscription
Black Mischief
By Maureen Orth
February, 2007
| Quote: | | Conrad Black, Canada's most famous non-citizen, is home again in Toronto, awaiting trial in Chicago in March on 14 counts of criminal fraud, racketeering, obstruction of justice, money laundering, and mail and wire fraud. Once the powerful chairman of the third-largest newspaper in the world, Hollinger International - at its peak the owner of the London Telegraph, the Chicago Sun-Times, The Jerusalem Post, and more than 500 community newspapers in Canada and the United States - Black at 62 is facing a maximum of 101 years in prison, $164 million in fines, and forfeiture of assets in excess of $92 million. Apart from the criminal charges, Black is also facing numerous civil suits, including two major ones from Hollinger Inc., the Canadian holding company that controls more than 70 per cent of Hollinger International's voting stock. (-- p. 166) |
| Quote: | ...Conrad Black's defense will doubtless lean heavily on the premise that the board, as well as experts at Torys (international law firm accused of conflict of interest for representing both Hollinger Inc. and Hollinger International and for standing by while funds were diverted to Black; recently settled for $30 million) and KPMG (Hollinger's longtime auditing and accounting firm under fire for illegal tax shelters elsewhere), knew exactly what they were doing every time they said yes to him - including approving retroactively the purchase of $8 million worth of Franklin Rossevelt's papers. One board insider claimed to me that they had no idea at the time that Black had been writing a book about Roosevelt. The board also approved more than $200 million in excessive management fees paid to Ravelston, a holding company owned by Black and his associates, which once controlled Hollinger Inc.
To prove back guilty, the prosecutkon will have to show that he lied to the board, and therefore that - since Hollinger's lawyers and auditors raised no objections - the sophisticated board members were played for fools. It will be fascinating if Richard Perle, who the special committee says profited enormously from his service on the board, and Marie-Josee Kravis, who did not, take the witness stand, knowing that their statements could be used against them in ensuing civil suits, which require a lower burden of proof.
...The criminal trial is scheduled to begin in March at the earliest, and the court has ruled that until then all discovery-related civil actions, including defamation * suits Black has brought against Henry Kissinger, other members of the board, and (former S.E.C. chairman and counsel to Hollinger International's special committee, which authored a 513-page report to the S.E.C.) Richard Breeden, must be halted so as not to interfere with the criminal case. (-- p. 197) |
| Quote: | ... I had spoken to (Black's lawyer, 'Fast Eddie') Greenspan before Black so fervently decided to testify on his own behalf. Clearly Black's testimony was a delicate subject, and the only point where I found Greenspan at a loss for words. When I asked him if Black would take the stand, there was a long pause and then: "I'll leave that alone." In their award-winning 2004 book, Wrong Way: The Fall of Conrad Black, Jacquie McNish and Stewart Sinclair report that Greenspan has made a deal with Black that every time Black, who is known for his rococco vocabulary, uses big words in the courtroom he will have to pay Greenspan - $50 for five-syllable words, $40 for four-syllable, $30 for three. "He talks like that when his shoes are off," Greenspan informs me. "But something goes with those words. There is an appearance of a pompous arrogance." (-- p. 198)
More on Greenspan, who recently stepped down as a director at CryptoLogic, a Toronto-based developer of I-gaming software.
Wrong Way:
The Fall of Conrad Black
Hardcover
By Jacquie McNish and Sinclair Stewart
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| Quote: | ...According to numerous attorneys I spoke with, (Black's business partner, David) Radler worked out quite a cozy deal with (U.S. Attorney Patrick) Fitzgerald. He agreed to serve 29 months in jail, and the U.S. government will allow him to serve his time in Canada, where there is an accelerated parole system. Radler must pay a $250, 000 fine, and he has already paid back his share - $8.65 million - of the proceeds from the non-compete agreements. His plea bargain will remain contingent on how fully he cooperates with the prosecution. "David Radler will be a devastating witness," former Hollinger executive Paul Healy assures me. "He has a mind like a steel trap, and he never threw away a scrap of paper."
Meanwhile, Edward Greenspan says he cannot wait to have at Radler on the witness stand in order to discern which story is the real one - the one Radler told to the special committee, in which he seems to recall very little, or the one he told to the grand jury...As one of Canada's top political leaders tells me, "The centre of everything here is David Radler - his testimony, the perception of him, the deal he took upon himself with Fitzgerald, and the cross-examination of him by Edward Greenspan. There in a nutshell is the entire future of Conrad Black." (emphasis added) (-- pgs. 199-200) |
| Quote: | | ...Now a self-proclaimed freedom fighter, Black last fall went on the offensive. He began speaking - performing in public once again, using words like "fissiparous" (another $40 for Greenspan) from the podium and wowing Establishment audiences in Canada who are meant to feel that he is being picked on by Uncle Sam...(-- p. 203) |
The Trials of Henry Kissinger
*(and now one more from former pal, Black)
DVD
Read The Return of Henry Kissinger, Will we never be free of the malign effect of this little gargoyle? by Christopher Hitchens at the excellent Washington e-zine, Slate, Oct. 6/06.
Link to this entry
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| Posted: Fri Mar 16, 2007 11:19 am Post subject: |
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cbc.ca/thecurrent
The Current
Listen to the three-part report on
Conrad Black's prosecution
March 12/07
| Quote: | Conrad Black – Profile
As an internationally recognized media baron, Conrad Black relished a lavish lifestyle and became known for his extravagant spending on parties, travel, and hobnobbing with famous people.
Now, as a man charged with plundering his former company in order to support that jet-setting way of life … Lord Black is settling in for a tough and decidedly unglamourous court battle.
This week his fraud trial begins with jury selection in Chicago. And Lord Black will face a zealous prosecution ...A prosecution that will be relying heavily on the testimony of David Radler -- Lord Black's old friend and the former number 2 man at his old company, Hollinger. Mr. Radler's betrayal of Mr. Black -- initially surprising -- now threatens to be quite damaging.
To set the scene for this week's showdown in the Windy City, we were joined by Jacquie McNish. She's a senior writer for the Globe and Mail's Report on Business and the co-author with Sinclair Stewart of Wrong Way - The Fall of Conrad Black. Jacquie McNish was in our Toronto studio. |
| Quote: | Turncoats – David Radler Profile
Et tu Brute...Those famous last words uttered by a dying Julius Caesar. As Conrad Black prepares for the trial of his life - he may be recalling that phrase when it comes to his close friend and confidante David Radler. Mr. Radler was Lord Black's business partner for decades and helped him oversee his massive newspaper empire.
But when the hayday abruptly ended - with both men coming under suspicion for allegedly paying themselves for such things as non-compete clauses -- against themselves... Mr. Radler was the first to crumble. He turned on his friend and struck a deal with prosecutors - pleading guilty to one charge of mail fraud in return for little more than two years in prison.
To discuss who David Radler is, we were joined by Jeremy Hainsworth. He was the managing editor of Sterling Newservice for 2 years under David Radler and has known him since the mid 1990's. He is now the west coast correspondent for the Associated Press and we reached him in Vancouver. |
| Quote: | Turncoats - Lawyer and Business expert
David Radler has been called a rat by some - for agreeing to testify against Conrad Black. But one person's rat is another person's knight in shining armour.
Our next two guests are familiar with the often-subjective world of business ethics and law. John Rosen is a criminal lawyer in Toronto. He has seen more than a few people turn on their colleagues to save themselves. Mr. Rosen was in our Toronto studio. And Jeffrey Gandz is a professor at the Richard Ivey School of Business in London, Ontario. Among other things, he looks at the behaviour of individuals in corporations. He was on the line from Hong Kong this morning. |
| Quote: | | Note: We were surprised to find interviewees focused almost exclusively on the importance of the Radler ('Raddles') testimony when the real thrust of the evidence is contained in the corporate records. We predict that the failure by Black's Canadian lawyers to fully appreciate the much lower (than Canada's) burden of proof in U.S. fraud will be their client's undoing. |
Link to this entry
http://pokerpulse.com/legal/viewtopic.php?p=334#334
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| Posted: Thu Mar 29, 2007 12:51 pm Post subject: |
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Globe and Mail
Excruciatingly dull Toronto Daily
The lowdown for those betting
on Lord Black - or against him
Nobody's Business
By Patricia Best
March 27/07
| Quote: | Want to bet Conrad Black will beat the charges of fraud and racketeering and such in Chicago? Apparently plenty of people do.
It's inevitable that American popular culture would give us a gambling website taking bets on the fate of Lord Black. And indeed BetUS.com, which claims to be a leading online sports gambling site, is taking bets on a series of questions related to Lord Black's criminal trial.
A spokesman told Nobody's Business that the lines are "very active, especially in Canada and Britain." On the question of whether Lord Black will be found not guilty on all charges, the odds posted on the site are 10 to 1. So if you think he'll get off and you're right, every $5 bet would yield $50, plus the original stake.
So, what are the odds of a mistrial being declared? According to the site, 30 to 1. On the question of whether Lord Black will regain his Canadian citizenship before the end of 2008, the odds are listed at 5 to 1 that he will, and at 1 to 10 that he won't. Will Lord Black be stripped of his peerage ("Lord title," the site calls it) by the end of 2009? The site is giving 50 to 1 odds on a "yes" wager.
Even Lord Black's personal life is fodder for a wager: BetUS.com isn't favouring divorce for Lord Black. On the question of the former media mogul's marriage to Barbara Amiel ending by the close of 2008, the site favours the union enduring -- the odds are 5 to 1 that it will survive and 1 to 10 that it won't. (Excerpt from the Report on Business, p. B2) |
Link to this entry
http://pokerpulse.com/legal/viewtopic.php?p=338#338
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| Posted: Fri Mar 30, 2007 10:58 am Post subject: |
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FT.com
Black takes a gamble with 'Fast Eddie'
By Stephanie Kirchgaessner
March 29/07
| Quote: | When Judge Amy St Eve last week sustained an objection from prosecutors during the questioning of a witness by Conrad Black's defence attorney, Edward Greenspan, the veteran Canadian jurist turned to his co-counsel with a perplexed look on his face.
"You lost," Edward Genson explained to his colleague, seemingly in jest.
The joke – if, indeed, it was a joke – was an apt one. In hiring Mr Greenspan, Lord Black has taken the unusual step of depending on an attorney to defend him against criminal fraud charges who, despite being the most famous defence lawyer north of the border, is not licensed to practise in the US.
As a condition of the court's decision to allow "Fast Eddie", as he is known in Canada, to serve as Lord Black's counsel, the former media executive had to agree that, if found guilty, he would not appeal the verdict on the grounds of Mr Greenspan's lack of familiarity with US law. So far, the gamble appears to have been a risky one. Mr Greenspan, 63, who went to school with Lord Black's wife, Barbara Amiel, and co-wrote a book with her ex-husband, has been seen nodding off during the trial.
Missteps in his cross-examination of Gordon Paris, who took over Hollinger International after Lord Black was forced to resign, meant a crucial line of questioning was ruled out, and jurors never heard testimony that Mr Paris had once failed to report stock holdings to securities regulators. The testimony could have raised questions about Mr Paris or, at least, shown the jury not all omissions to the SEC are criminal.
...Potentially complicating the handling of Lord Black's case, some attorneys admit, is that Mr Greenspan is sharing the spotlight with Mr Genson, 65, who is equally famous in Chicago. While the two star attorneys appear to be in sync, experts say having "two captains" can strain a defence team by offering sometimes conflicting theories of a case.
Mr Genson's strength in the courtroom lies in being able to form a theory of the case that fits the evidence, and, says Hugh Totten, a Chicago lawyer, being able to bring out his client's shortcomings, as when he spoke of Lord Black's "arrogance".
"He is a pretty good strategist, but I wonder whether Conrad has not painted him in a corner, because by the time this got to Ed Genson, Conrad Black had already . . . taken a position on the big issues," Mr Totten says. |
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| Posted: Tue Dec 11, 2007 2:44 pm Post subject: |
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The Globe and Mail
Why he fell
In the end, it was three samll-town newspapermen
- not the prosecution's star witness - who helped
convict Lord Black on four charges for which he
could serve 20 years
By Paul Waldie
July 14/07
| Quote: | CHICAGO — Conrad Black had never met the three men whose testimony was key to his conviction yesterday. Neither Mike Reed, Lloyd Case nor David Paxton would easily fit into Lord Black's high-powered social circle, but these men did more to deliver the guilty verdicts than anyone else.
Their testimony was central to the convictions on three counts of mail fraud. Unlike other high-profile witnesses they never wavered on the witness stand or lost their credibility.
A Chicago jury found Lord Black guilty yesterday of three counts of fraud and one count of obstruction of justice. He faces as much as 15 to 20 years in prison. Three other former executives of Hollinger International Inc., John Boultbee, Peter Atkinson and Mark Kipnis, were found guilty of three fraud charges, and face lesser penalties.
... The insertion of Lord Black and the others in the non-competition agreements formed the crux of the prosecution case against Lord Black. Prosecutors argued the non-competition money should have gone to Hollinger International, not the individuals or Hollinger Inc.
... "The buyers didn't request it," prosecutor Julie Ruder said repeatedly during closing arguments. "This case is about why. Why was that money paid." She highlighted the testimony of Mr. Reed, Mr. Case, Mr. Henson and Mr. Paxton. Lawyers for Lord Black and the others argued that the terms of the deals clearly stated that the non-competition agreements were required. And, they suggested the buyers really did want Lord Black and the others included because they were involved in other newspaper ventures outside of Hollinger International. But in the end, the jurors sided with the prosecutors and convicted Lord Black, Mr. Boultbee, Mr. Atkinson and Mr. Kipnis for fraud over these very deals.
The other fraud convictions relate to a non-competition agreement the men concocted with no real transaction. It involved a Hollinger International subsidiary called American Publishing Company. Prosecutors successfully argued that Lord Black and the others simply drew up non-competition agreements as a way of disguising payments to them from APC. Why disguise them as non-compete payments? Because at the time those payments were tax-free in Canada.
To drive home their point, prosecutors showed jurors that at the time the non-competition deal was arranged, APC had sold virtually all of its newspapers and was down to a single paper in Monmouth, Calif. Lead prosecutor Eric Sussman showed the jury a copy of the paper, featuring a story on snowboarding, telling the jury that this was the paper Lord Black was paid $2.6-million not to compete with. In short, he said, Lord Black and the others were paid millions of dollars not to compete with themselves.
As for Lord Black's conviction on obstruction of justice, he may have to blame his loyal secretary Joan Maida.
The charge related to Lord Black's removal of 13 boxes from his Toronto office in May of 2005, despite a court order not to remove material and a pending subpoena from the U.S. Securities and Exchange Commission. Lord Black was caught on a security camera removing the material.
Ms. Maida testified for Lord Black during the trial, and she tried to explain to jurors that the boxes contained only personal items that were being taken to her home. But she became so confused and contradictory on the witness stand that even a lawyer from another defence team muttered: "Why did they call her?" |
cbc.ca
Conrad Black sentenced to 78 months in jail
Must report to begin sentence on March 3
Dec. 10/07
| Quote: | Canadian-born Conrad Black was sentenced Monday in Chicago to 6½ years in prison for his role in the misappropriation of millions of dollars from the newspaper empire he once headed.He was also fined $125,000 US. Black, who remained expressionless as his sentence was pronounced in federal court, must also forfeit $6.1 million US — the estimated amount of the fraud, according to a pre-sentence report. Black must report to begin his sentence on March 3 and will be free until then. His lawyers have asked that he be allowed to serve his sentence at the minimum-security Coleman Federal Correctional Complex in Florida. Under U.S. rules, he must serve at least 85 per cent of his sentence.
"I think the fact we're appealing speaks for itself," Black said as he left the court.
... The sentence was at the low end of a sentencing guideline that Judge Amy St. Eve had indicated was appropriate for the former media baron. St. Eve ruled Black had committed a serious crime and that he had violated his duty to Hollinger International and to its shareholders. "No one is above the law in the United States," she told Black. "I cannot understand how someone of your stature could engage in the conduct you engaged in and put everything at risk," she said.
Black addressed the court for just a couple of minutes — his first words inside the courtroom since the case began. Despite speaking out frequently and loudly outside court, he said he was always respectful. "I have never once uttered one disrespectful word about this court, your honour, the jurors or the process," he said. He thanked the judge and said he regretted the subsequent collapse in the share price at Hollinger International — the newspaper company he was convicted of defrauding. |
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| Posted: Sat Jun 28, 2008 2:33 pm Post subject: |
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CTV.ca
Corporate media
Black loses appeal of obstruction and fraud charges
June 25/08 2:49
| Quote: | The U.S. Court of Appeals has ruled against former newspaper magnate Conrad Black in his appeal of his fraud and obstruction of justice convictions.
"I think it's good news for the shareholders of Hollinger International and the investing public," Eric Sussman, who led the four-person team that prosecuted Black. ... The ruling shows "these laws are being taken seriously and that people who defraud the shareholders and take money from the company will be prosecuted. I think that's the best news," he said. U.S. Attorney Patrick Fitzgerald also released a statement saying he was pleased by the court's decision. "The Court found across the board that the defendants received a fair trial and now must serve their sentences," said Fitzgerald, attorney for the Northern District of Illinois. "This decision vindicates the rights of shareholders to expect that corporate officers will safeguard their assets, and put the shareholders' interests before their own." Chicago's Seventh Circuit Court of Appeals heard the defence's arguments about three weeks ago.
Black's appeal lawyer, Andrew L. Frey, released a short statement on Wednesday saying, "We are very disappointed with the decision and are carefully considering further options." ... Black could ask the entire Seventh Circuit court to rehear the case or ask the Supreme Court of the United States to hear his arguments. "Given the fact that the appeal court said there are not really meaty legal issues here, it's unlikely the (Supreme Court) would be interested in delving into the facts," he said.
Black had previously said he would not seek a presidential pardon. U.S. President George Bush leaves office in January. Most presidents have pardoned individuals, particularly if they've been politically loyal. Black holds conservative political views and Bush is a conservative Republican.
If he doesn't obtain a pardon, Black would have to serve 85 per cent of his sentence before being considered for release. The other defendants received lesser terms:
Jack Boultbee, of Victoria, B.C., was considered Black's key financial advisor. He was sentenced to 27 months in prison, followed by three years of supervised release. He also must pay $152,000 in restitution. Peter Atkinson, of Oakville, Ont., had been the chief legal counsel for Hollinger. He was sentenced to 24 months in prison and given a $3,000 fine. U.S. lawyer Mark Kipnis was sentenced to six months house confinement. David Radler, a Canadian citizen and longtime Black associate who pleaded guilty and testified for the prosecution, received a 29-month sentence in a plea bargain agreement. There had been speculation he would apply to serve his sentence in Canada, but ... Radler is still in the U.S.
Black, while born in Canada, is now a British citizen. He gave up his Canadian citizenship in 2001 to accept an appointment to the British House of Lords. He cannot apply to serve his sentence here, and most experts think it is now unlikely he could ever regain his Canadian citizenship without a direct ministerial order. |
Highlights of the judgment:
About the substance of the case, fraud:
| Quote: | Notice, too, how honest services fraud bleeds into money or property fraud. ... In this case, had the defendants disclosed to Hollinger’s audit committee and board of directors that the recharacterization of management fees would net the defendants a higher after-tax income, the committee or the board might have decided that this increase in the value of the fees to them warranted a reduction in the size of the fees. If $10 in tax-free income is worth $15 to the recipient in taxed income, the employer who learns about the tax break may require the employee to accept in tax-free income less than $15 in taxed income.
This is not to say that every corporate employee must advise his employer of his tax status. But the defendants had a duty of candor in the conflict-of-interest situation in which they found themselves. Instead of coming clean they caused their corporation to make false filings with the SEC, and they did so for their private gain. Such conduct is bound to get a corporation into trouble with the third party and the SEC. (emphasis added) (-- pgs. 7-8) |
On Black's obstruction charge:
| Quote: | We turn to the obstruction of justice charge against Black. The charge is that he concealed or attempted to conceal documents “with the intent to impair the [documents’] integrity or availability for use in an official proceeding.” 18 U.S.C. § 1512(c)(1). There was evidence that Black knew that the alleged frauds were being investigated by a grand jury and by the SEC. In the midst of these proceedings Black with the help of his secretary and his chauffeur removed 13 boxes of documents from his office, put them in his car, was driven home, and helped carry them from the car into his house. He later returned them, but no one knows whether the boxes he returned contained all the documents that had been in them when he removed them from his office. It is true that copies were available to the government before the boxes were removed, but it was material to the investigation whether Black had had copies in his office. For that would mean that he had received them, in which event his denials of knowledge of their contents would be undermined.
Anyway, the statute does not require proof of materiality ... Black’s secretary testified that Black intended to remove the documents to a temporary office that she would set up for him in her home because he had to vacate his office at Hollinger within 10 days. But this testimony was inconsistent with his having put the boxes in his car (not hers, which was at the scene) and taken them home. There was also evidence that in removing the boxes he tried to avoid the surveillance cameras in the building—unsuccessfully. (-- pgs. 11-12) |
On the culpability of lawyer Kipnis:
| Quote: | | Defendant Kipnis, the least culpable of the defendants, as indicated by the light sentence he received (though any felony conviction is likely to be devastating for a lawyer), complains that he should have been acquitted because he knew nothing about the management fees and had nothing to gain from the fraud. The last point has no merit, since Black controlled Hollinger and therefore held Kipnis’s fate in his hands. The first two points are really just one point, with respect to which the ostrich instruction was decisive. It was he who prepared the agreement that purported to grant covenants not to compete in exchange for $5.5 million. He knew that the covenants made no sense, since APC was on its way out of the newspaper business and the other grantors of the covenants not to compete were not about to leave Hollinger to start a newspaper in Mammoth Lake. The jury was entitled to infer that Kipnis suspected a fraud, which he facilitated by his preparation of the agreement, but asked no questions lest his suspicion rise to a certainty. He buried his head in the sand. (emphasis added)(-- pgs. 15-16) |
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