Newspaper baron Lord Conrad Black charged in fraud case |
|
|
Published
:
Sat, 19 Nov 2005 01:35
|
CHICAGO: Conrad Black, who ran a media empire as chairman of Hollinger International, and three other executives of the firm were charged in a U.S. federal court of fraud involving the $2.1 billion sale of several hundred Canadian newspapers and misuse of corporate benefits. Canadian-born Black, now 61, and a member of the British House of Lords, is accused in the 11-count indictment of cheating the company's U.S. and Canadian shareholders and Canadian tax authorities.
The 11-count indictment includes misappropriation of $51.8 million from Hollinger International in a scheme that diverted funds from the sale of a number of U.S. assets, mostly Hollinger newspapers, to CanWestGlobal Communications Corp of Canada in 2000. It contended that the defendants had entered into a series of secret and misleading transactions that funneled payments to themselves disguised as noncompetition fees or as a "management breakup fee" made to Ravelston, a company controlled by Black.
Black is also charged with misuse of corporate perks by taking the company jet to Bora Bora for a vacation and spending more than $60,000 on a birthday party for his wife, the conservative newspaper columnist Barbara Amiel.
Arrest warrants have been issued for Black and two of the former executives but officials said they would be allowed to appear voluntarily in the Chicago federal court. Prosecutors said they are seeking recovery by forfeiture of at least $80 million from Black and the others.
U.S. attorney Patrick Fitzgerald said it has been the grossest abuse by officers or directors and insiders. "By lining their pockets they went about a course of conduct where they ... never told the audit committee or the board of directors, or through them the shareholders, what was going on and how they were self-dealing and taking money from the shareholders for themselves."
The other former Hollinger executives named in the indictment are John Boultbee, 62, a Toronto area accountant, Peter Atkinson, 58, a Canadian attorney and former executive vice president of Hollinger, and Mark Kipnis, 58, Chicago, an attorney.
The indictment comes in the wake of a plea deal struck with prosecutors by a former Black loyalist and Chicago Sun-Times publisher, David Radler, who pleaded guilty in September to a single count of mail fraud and agreed to cooperate and testify against others involved. Radler can be sentenced to serve 29 months in prison and pay a $250,000 fine.
Chicago-based Hollinger publishes the Chicago Sun-Times, community newspapers in the Chicago area and a few small publications in Canada. It sold the Jerusalem Post and The Daily Telegraph of London in 2004.
Black said he was innocent and would fight the charges. In a statement, his lawyer Edward Greenspan said Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment.
The charges carry penalties of up to 40 years in prison and fines up to $2 million.
The Hollinger International board had dismissed him as chief executive in 2003, alleging he and others took $32 million in unauthorized "noncompete payments" associated with the sale of smaller newspapers. He tried to fight back through Hollinger Inc., the holding company for Hollinger International, and even tried to take it private.
|
|
|
|
|
|
Print this Story
