UPDATE 5-Ex-media baron Conrad Black freed from U.S. prison
* Conrad Black granted release on $2 million bond
* Freed from Florida prison, Black to appear in Chicago
* Black lacks assets, friend putting up bond, lawyer says
* Black's release means he won't go back to prison-expert (Updates with Black arriving home at Florida mansion)
CHICAGO, July 21 (Reuters) - A U.S. judge on Wednesday released former media baron Conrad Black from prison on $2 million bond, while she decides whether to throw out his 2007 conviction for defrauding shareholders.
Adhering to rulings by higher courts, trial Judge Amy St. Eve of the U.S. District Court set Black, 65, free but restricted him to the continental United States for the time being.
Black left the Coleman Federal Prison in central Florida on Wednesday afternoon, according to prison officials.
He left without being spotted by waiting reporters but was seen hours later, in sweat pants and a white T-shirt, sitting cross-legged in the back of a Lincoln Navigator SUV as it arrived at his ocean-front mansion in Palm Beach, Florida.
The Canadian-born Black, a British peer who once led the world's third-largest newspaper publisher, with titles including London's Daily Telegraph, Canada's National Post and the Chicago Sun-Times, entered a Florida prison in March 2008.
A jury convicted him of three counts of fraud and one count of obstruction of justice in a scheme that swindled now defunct media holding company Hollinger International Inc out of $6.1 million. He was acquitted of nine other counts, including racketeering.
Black and three fellow Hollinger executives also convicted in the case arranged to pay themselves tax-free bonuses disguised as non-compete fees as they sold off pieces of the Hollinger empire.
St. Eve sentenced Black to 6-1/2 years in prison, of which he has served slightly more than two years.
NOT GOING BACK
"My gut tells me the (courts) don't release him on bail and then expect him to go back to jail," said Hugh Totten, a Chicago attorney who has closely followed the case.
"One of the elements of being entitled to bail on appeal is that you're likely to win," he added.
On Wednesday, St. Eve ordered Black to appear in Chicago to be "admonished" about the terms of his release.
Black's lawyer, Miguel Estrada, said Black "does not have assets available to him" and that conservative businessman Roger Hertog would be providing his $2 million bond.
Black will travel to Chicago on a commercial flight from Florida and appear before St. Eve at midday on Friday.
Black's Palm Beach mansion is up for sale, and he may live in a New York hotel while the appeal process continues, Estrada said.
St. Eve initially denied a defense request for Black to obtain a new British passport. The British consulate in Orlando, Florida, has his paperwork, Estrada said.
Last month, Black won a victory when the U.S. Supreme Court limited the reach of the federal fraud law that prosecutors used frequently in corruption cases against government officials and executives like Black and former Enron Corp Chief Executive Jeffrey Skilling.
The high court stopped short of overturning convictions and sent the cases back to lower courts.
The federal law is applied to fraud cases in which a person is accused of depriving others of the intangible right to "honest services." It has been criticized as being too vague and overused.
Black still faces numerous civil suits related to Hollinger, and U.S. tax authorities have demanded $71 million from him for unpaid taxes. (Additional reporting by Hans Deryk in Palm Beach; Writing by Andrew Stern; editing by Todd Eastham)