August 18, 2005
2 Former Top Executives of Hollinger Charged With Fraud
By RICHARD SIKLOS

F. David Radler, the former publisher of The Chicago Sun-Times and longtime business partner of Conrad M. Black, the deposed chief executive of Hollinger International Inc., was indicted today on criminal charges of fraud along with another former executive of the newspaper company.

Lord Black, who used to cut a swashbuckling figure in international media and political circles, was not part of the indictment. Patrick Fitzgerald, the United States Attorney in Chicago, told a news conference that he was continuing to investigate the financial dealings of the former controlling shareholders of Hollinger International. He declined to comment specifically on whether charges against Lord Black are pending.

Mr. Fitzgerald said Mr. Radler, who co-founded Hollinger International with Lord Black and built it to the world's third-largest newspaper group by circulation in the mid-1990's, had agreed to plead guilty and cooperate in the investigation.

The charges brought today were filed against Mr. Radler, as well as Mark Kipnis, who served as Chicago-based Hollinger International's general counsel, and the Ravelston Corporation, a holding company that sat near the top of Lord Black's web of companies. Lord Black was the majority shareholder in Ravelston, the vehicle though which he ultimately controlled Hollinger International, a company traded on the New York Stock Exchange. Ravelston is now in receivership.

A spokesman for Lord Black said he had no comment today, but he has previously vowed to vigorously defend himself allegations of impropriety against him.

Today's seven-count indictment accused the defendants of diverting "more than $32 million through a complex series of self-dealing transactions." All three defendants were charged with five counts of mail fraud and two counts of wire fraud.

Mr. Radler, a Canadian who lives in Vancouver, is expected to enter a guilty plea at his arraignment. Its date has not been set, but a spokesman for Mr. Fitzgerald said prosecutors would disclose at that time what sort of deal Mr. Radler had reached, including the jail time - if any - he will face. Each of the counts against the men carries a maximum term of five years in prison, as well as $500,000 fines per count beyond the return of any misappropriated funds.

In an unusual nod to cross-border legal matters beyond its purview, Mr. Fitzgerald said in a statement that "the individual and corporate defendants cheated public shareholders in the U.S. and Canada, as well as Canadian tax authorities of tax revenue."

Lord Black, Mr. Radler and Ravelston are already the subject of a civil lawsuit filed by the Securities and Exchange Commission last November asserting that from 1999 to 2003 they diverted $85 million from the company through "self-dealing" transactions.

Hollinger International's board - most of whose members were put in place by Lord Black when he was its chairman and chief executive - has sued the men and several others, including Lord Black's wife Barbara Amiel, a former director and Hollinger International executive, accusing them of siphoning more than $300 million from the company.

In interviews and court filings, Lord Black has previously argued that any money he took out of the company was authorized by the company's board.