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Trial of former media tycoon Black to begin

Prosecutors say that the former chairman and others illegally pocketed Hollinger funds.

March 12, 2007|Mike Robinson | The Associated Press

CHICAGO — As chairman of the far-flung Hollinger newspaper empire, the tall, silver-haired, magnificently tailored Conrad Black reigned supreme as one of the world's most powerful media moguls.

His lifestyle included $60,000-plus birthday parties for his wife, dinners with the rich and famous and jaw-dropping renovations of a Park Avenue apartment.

Black, however, will spend much of this spring in a federal courtroom in Chicago facing charges that he scammed Hollinger International Inc. stockholders out of $80 million while he sold off company assets.

Federal prosecutors say he brazenly -- and illegally -- billed the company for a vacation on the Pacific island of Bora Bora, dinners with Henry Kissinger at Le Cirque in New York and a $90,000 restoration of his antique Rolls Royce.

With jury selection scheduled to begin Wednesday, the 62-year-old Lord Black of Crossharbour -- born in Canada but now a full-fledged British baron -- is digging in for the fight of his life.

"I know I am innocent of the allegations against me, as does anyone who actually knows me, and I am about to prove it," Black wrote days ago in the British magazine Tatler.

If Black is convicted of all counts, he could be sentenced to 101 years in prison. The actual time would be determined by the judge.

Federal prosecutors are counting on help from star witness David Radler, the former deputy chairman of the board of Hollinger and long the No. 2 man by Black's side. He has pleaded guilty to one count of mail fraud and agreed to tell everything he knows about Black in exchange for a 29-month sentence and $250,000 fine.

Black's Canadian defense attorney, Edward L. Greenspan, is expected to cast Radler as an ungrateful liar who would say anything to stay in the government's good graces.

At the heart of the charges is Hollinger International, which once owned the Chicago Sun-Times, the Toronto-based National Post, the Daily Telegraph of London, the Jerusalem Post and hundreds of community papers in the U.S. and Canada. Black stepped down as chief executive in 2003 and was ousted as chairman the next year.

Since Black's empire crashed amid shareholder lawsuits and criminal charges, all the large papers except the Sun-Times have been sold and the name of the company has been changed to Sun-Times Media Group.

Going on trial along with Black are three former Hollinger executives: Vancouver attorney John Boultbee and Toronto accountant Peter Atkinson -- both of whom served as executive vice president at different times -- and attorney Mark Kipnis, a corporate secretary.

Black is the sole defendant charged with racketeering. He also is charged with four counts of mail fraud, three of wire fraud, two of tax fraud, one of money laundering and one of obstruction of justice.

The most significant charges accuse Black and his co-defendants of selling off hundreds of community papers starting in 1998 and pocketing payments from the buyers in return for promises not to compete with them. Prosecutors say the proceeds belonged in Hollinger's corporate treasury.

Some transactions were complex, and jurors are going to have to wade through a blizzard of documents. Easier to grasp will be the government's claim that Black dipped into Hollinger funds to pay for things such as the birthday party for his wife, columnist Barbara Amiel Black.

Black's attorneys have suggested that he is being unfairly targeted because of his assets, arguing in one court filing that since "biblical times, and probably before, the wealthy have been envied and condemned."

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