CHICAGO (Reuters) - Conrad Black and his associates systematically stole $60 million from the publishing empire they once ran and then tried to hide what they did, prosecutors told jurors in final arguments at the former media baron’s criminal fraud trial on Monday.
“We are not here because somebody made mistakes. We are not here because somebody didn’t disclose something in a timely fashion,” prosecutor Julie Ruder told the 12 women and four men as the trial entered its 14th week.
“We are here because five men — these four defendants and David Radler — systematically stole $60 million. They checked their fiduciary duty at the door,” she said.
Radler is Black’s long-time business partner who turned government informer, pleaded guilty to one count of fraud in a deal that will send him to jail, and was the prosecution’s star witness in the trial.
“Did they try to cover their tracks? Yes,” she said. “It is time to expose this cover story for the lie that it is. They had a duty, a duty to shareholders. But their duty was to each other, their loyalty was to each other ...” she said.
“Conrad Black fancied himself a proprietor. No sackcloth and ashes for him,” she said of the flamboyant 62-year-old Canadian-born Black who is now a member of Britain’s House of Lords.
“The others went along because it enriched them,” she said. “They decided to take a piece of the pie. There is a great divide in this criminal trial. David Radler and others knew the truth ... Shareholders did not know the truth.”
Black and three other former executives at Hollinger International Inc. are accused of pilfering $60 million in so-called non-competition payments that prosecutors contend rightfully belonged to the publishing giant and its shareholders.
The payments compensated Black and the others for agreeing not to compete against the buyers of hundreds of publications that were being sold to pay accumulated debt. Prosecutors contend they were turned into essentially non-taxed bonuses which the defendants awarded themselves.
Lawyers for Black and the others have tried to show that non-competition agreements are a common business practice, and were properly disclosed to Hollinger International’s auditors and approved by its high-profile board of directors.
Black is charged with mail fraud, wire fraud, obstruction of justice, racketeering and filing false tax returns. If convicted he could face decades in prison and forfeiture of millions of dollars.
Black and former chief financial officer Jack Boultbee, 63, also face charges they abused company perks by allowing Black to use a company jet on a South Seas vacation, buy a luxury New York condominium owned by the company, and use company funds to defray the cost of a surprise birthday party for Black’s wife at an upscale New York restaurant.
Boultbee and co-defendants Peter Atkinson and Mark Kipnis, both lawyers for the company, face lesser charges.
The closing arguments are expected to consume most of the week before the jury gets the case. Twelve of the 16 jury members who sat through the trial will decide the case while four others will be kept in abeyance as alternates.
Hollinger was one of the world’s largest publishers before Black and the others began disposing of its properties. The company has since been renamed the Sun-Times Media Group Inc..