FACTBOX: Charges against Conrad Black

Fri Jul 13, 2007 11:41am EDT
 
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(Reuters) - Conrad Black, the former chairman and chief executive of media giant Hollinger International Inc., and three former associates were charged with defrauding the company and its shareholders out of $60 million.

- Black was charged in nine fraud counts, including six related to so-called non-compete payments arising out of eight deals Hollinger made between 1998 and 2001 as it sold off the bulk of its far-flung newspaper assets.

The tax-free payments to the executives, who included Black's one-time partner turned government witness David Radler, and to companies they controlled, were said to be compensation for agreeing not to compete with the buyers for periods up to five years.

Prosecutors argued the buyers never asked for most of the non-competition agreements and the payments were actually unapproved, disguised bonuses.

- Three other fraud counts against Black, 62, related to accusations that he abused company perquisites. Black used the company plane to fly himself and wife, Barbara Amiel Black, on a vacation to the South Seas island of Bora Bora. He ordered Hollinger to pay $40,000 of the $62,000 cost of a birthday party for Barbara held at the upscale La Grenouille restaurant in New York. And Black bought a luxury New York cooperative apartment from Hollinger in 2000 for the same price -- $3 million -- the company had purchased it for in 1994.

- Black was charged with obstructing justice for removing 13 boxes containing documents from his Toronto offices in 2005, violating a Canadian court order. Security video showed Black carrying boxes out to his car with his chauffeur.

- Black faced a charge of racketeering, which involves two or more acts in furtherance of the accused scheme.

- Black was accused on two counts of causing Hollinger to file false tax returns in 1999 and 2000, based on the missing revenue paid as non-compete payments.

- A charge of money laundering against Black was dropped during the 15-week trial, which began with jury selection in mid-March and heard from some 50 witnesses.

- Co-defendant Jack Boultbee, a 64-year-old Canadian and former chief financial officer, faced the same nine fraud counts and the two tax counts as Black. Canadian Peter Atkinson, 60, a former company vice president and attorney, faced six fraud counts and one tax count. Mark Kipnis, 59, and the lone American on trial who was Hollinger's corporate counsel, faced nine fraud counts related to the non-compete scheme and the two tax counts.

- The fraud counts each carried a potential five-year prison sentence; obstruction and racketeering each called for up to 20 years; and the tax counts three years each -- bringing the total for Black to 91 years though a much-reduced sentence would be likely. The crimes charged against Black also called for millions in potential fines and $92 million in forfeitures -- including Black's Palm Beach, Florida, estate and assorted luxuries such as a $2.6 million diamond ring.

 

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