Conrad Black indicted for fraud in US
Vikas Bajaj, The Times of India, Friday, November 18

A federal grand jury indicted Conrad M Black, the prominent and flashy media entrepreneur, on eight counts of mail and wire fraud today along with three of his deputies, the United States Attorney for Chicago, Patrick Fitzgerald, said.

The charges are the culmination of an investigation into a series of complex transactions that prosecutors contend Lord Black and his associates used to enrich themselves of millions of dollars at the expense of the two publicly traded companies, Hollinger International and Hollinger, that he controlled in Chicago and Toronto.

Black has denied the charges, and a statement issued by his lawyers said "Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment. It will be shown that he has, at all times, acted within the law."

Hollinger International at one time published several newspapers around the world including the Daily Telegraph in London, the National Post in Toronto and the Jerusalem Post, as well as the Chicago Sun-Times, which it still owns.

The company was once the third largest newspaper company by circulation. Hollinger was a holding company that controlled Hollinger International.

Black served as chairman and chief executive of both entities. The indictment outlines two money-laundering schemes that Black and his aides are accused of devising.

Media mogul Conrad Black indicted for fraud in US

Washington (dpa) - Conrad Black, the media mogul who once headed the world's third largest publisher of English-language newspapers including London's Daily Telegraph and the Chicago Sun- Times, Thursday was indicted by a US federal grand jury for $51.8 million fraud.

The charges follow an August indictment on separate fraud charges that is still pending and valued at $32 million, according to a statement from the US Department of Justice.

Black made headlines five years ago when he gave up his Canadian citizenship to take British citizenship and join the British House of Lords. He was ousted as chairman and chief executive officer of Hollinger International, the company he built and then helped dismantle, in 2003, following allegations that he helped loot the company.

He quit as chairman and chief executive of Hollinger Inc. last year as a Canadian court was about to consider a shareholder's request to remove him from both posts, Bloomberg financial news service reported.

Thursday's charges were brought by Patrick J. Fitzgerald, the US states attorney who is involved in another high profile case - the prosecution of the White House CIA leak case.

Black and three other former top Hollinger executives were charged with cheating "public shareholders in the US and Canada" and dodging Canada's taxing authorities.

The charges allege that the four men engaged in a series of "either secret or false and misleading transactions" in the sale of newspaper publishing groups in the US and Canada.

"These allegedly fraudulent sales were designed to enrich the defendants by funnelling payments disguised as non-competition fees, the statement said.

In the multi-billion dollars sale of assets to CanWest Global Communications Corp., there was a fraudulent payment of a "management agreement break-up fee" to themselves or companies they controlled, at the expense of HOlliger's shareholders and corporate assets, the prosecutor charged.

Corporate perks were misused for a "lavish" birthday party for Black's wife, to fly a company jet for a South Pacific facation and to operate two New York City Park Avenue apartments, the charges said.

Conrad Black indicted for fraud in US
TurkishPress.com

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A US grand jury indicted tycoon Conrad Black on charges that he siphoned off millions of dollars from his newspaper empire.

US Attorney Patrick Fitzgerald announced the 11-count indictment of Black and three associates after months of investigations into malfeasance at what was once one of the world's biggest media groups.

Black, 61, who renounced Canadian citizenship to become a member of the British House of Lords, was accused of misappropriating 32 million dollars from Hollinger International, the company that operated his interests.

He was also charged with fraud relating to the misuse of corporate perks and a scheme that improperly diverted 51.8 million dollars from the 2.1 billion dollar sale of several hundred Hollinger newspapers to CanWestGlobal Communications Corp. of Canada in 2000.

"For years Conrad Black lived large on shareholders," Fitzgerald told reporters as he described how Black and his associates lied to audit committees and board members to secure "bonuses" disguised as non-competition agreements.

"What has happened here has been the grossest abuse by officers and director," Fitzgerald said. "The insiders at Hollinger -- all the way to the top of the corporate ladder -- whose job it was to safeguard the shareholders, made it their job to steal and conceal."

Black was said to have taken advantage of corporate perks by throwing a lavish birthday party for his wife and using a corporate jet to take a vacation to Bora Bora.

When Hollinger accountants asked Black to reimburse the company for the tens of thousands of dollars for the jet, Black replied in an e-mail "no such outcome is acceptable," the indictment alleges.

Black faces eight counts of fraud, each of which carries a maximum penalty of five years in prison and big fines.

The indictment also calls for the forfeiture of nearly 100 million dollars in assets, including Black's Palm Beach, Florida home.

Fitzgerald declined to comment on the whereabouts of Black or the other defendants, but said they were being asked to surrender to US authorities. He said extradition proceedings would be initiated if they do not face the charges.

The federal prosecutor would not speculate on what impact Black's membership of the House of Lords would have on any extradition request to Britain.

"I don't want to offend any foreign court by speaking to how they would rule," he said.

Black created Hollinger International to operate the group's newspapers, that still includes the Chicago Sun-Times.

Other major newspapers, such as the British newspaper, The Daily Telegraph, and The Jerusalem Post, have been sold off.

The company was controlled through Canadian-based Hollinger Inc., which in turn was controlled by Black's personal holding company Ravelston.

Black and his closest deputies have been under criminal and securities investigation in the United States and Canada for allegedly siphoning money and assets.

A superseding indictment unsealed in Chicago Thursday named Black, Hollinger International's former chief financial officer John Boultbee; former vice president and general counsel Peter Atkinson; another vice president and attorney Mark Kipnis; and Ravelston.

David Radler, former publisher of the Chicago Sun-Times, was indicted in August and subsequently pleaded guilty in a deal with prosecutors.

According to the 60-page indictment, Black and his associates schemed from January 1999 through May 2001 "to defraud" Hollinger International and its shareholders "of money, property and their intangible right of honest services, to defraud the Canadian tax authorities of tax revenue, and to obtain money and property from these victims by means of materially false and fraudulent pretenses, representations, promises and omissions."

BOARD
Hollinger to cut big-name directorsBoard members including Kissinger, Perle criticized for approving certain payments
By JACQUIE MCNISH, Saturday, November 19, 2005 Page B5

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Hollinger International Inc. will soon be showing the door to former political heavyweights Henry Kissinger, James Thompson, Richard Perle and four other directors who were hand-picked by Conrad Black to serve on the company's board.

According to people close to the company, Hollinger International will approve a new slate of directors at a board meeting set for Dec. 14, when the company plans to finalize material for its annual proxy statement ahead of its planned annual meeting in January.

Lord Black and his wife, Barbara Amiel, had been widely expected to step down since his voting control of Hollinger International was effectively frozen this summer when his personal holding company Ravelston Corp. Ltd. filed for bankruptcy protection. As a result of the bankruptcy protection, Ravelston's indirect voting stake in Hollinger International is now managed by a court-appointed receiver.

It is understood that some of the company's shareholders have been pressuring Hollinger International chief executive officer Gordon Paris to also cut the company's ties with Lord Black's so-called legacy directors who have been widely criticized for their alleged failure to sound the alarm about unusual transactions or to challenge unusually lavish benefits and compensation paid to Lord Black, who was chairman and CEO.

The legacy directors were cast in a devastating light last year in a report by Hollinger International's special committee of directors. The report filed with the U.S. Securities and Exchange Commission alleged that the board "functioned more like a social club than as the board of a major corporation, enjoying extremely short meetings followed by a good lunch and discussion of world affairs."

The other three remaining legacy directors are former Defence Department adviser Richard Burt, former Hollinger International executive Daniel Colson, and Israeli businessman Shmuel Meitar.

None of the directors could be reached, except for former Illinois governor James Thompson, who declined to comment. A spokesman for Hollinger International declined to comment.

Herbert Denton, a vocal New York shareholder activist and Hollinger International shareholder said he and other shareholders have been in recent discussions with the company about moving it into a new era with a new slate of directors.

"These directors were blindsided by Black. They have been shocked and concerned about their reputations. They've done their best to clean up a messy situation, but now its time for them to move on," he said.

Moving on will not solve the directors' problems. Sources said that the SEC has been reviewing the role of the seven directors appointed by Lord Black. In particular, sources said the SEC is probing the role of the company's audit committee, which was chaired by Mr. Thompson and included Mr. Burt and Marie Josée-Kravis, who resigned from the board last year.

The three directors came under criticism in the special committee report written by Hollinger International adviser Richard Breeden and three directors, Mr. Paris, Toronto director Graham Savage and former U.S. diplomat Raymond Seitz. The report chastised the committee as "ineffective," "careless" and "inert" when they approved more than $225-million in management fees paid to Ravelston and tens of millions of dollars in so-called non-compete payments to Black and his deputies.

In response to a shareholders' lawsuit that has criticized the board's actions, the directors and the company have reached a multimillion-dollar settlement to be paid to Hollinger shareholders out of funds provided by an officers' and directors' liability insurance policy. That payment has been held up in a court dispute with Lord Black.

Hollinger International has hired the U.S. search firm Spencer Stuart to search for new candidates for the company's board. It is also understood that five Hollinger directors appointed in recent years including Mr. Paris, Mr. Savage and Mr. Seitz have agreed to stand for renomination.

Hollinger International dumps Black, sues
Last Updated Sun, 18 Jan 2004 7:52:53

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NEW YORK - The Hollinger International newspaper chain removed Conrad Black as its chairman Saturday, hours after announcing a $200 million US lawsuit over alleged financial irregularities.

The lawsuit is against Black and associate David Radler. It accuses them of "sham" accounting, and alleges that they "diverted and usurped corporate assets." Several companies controlled by Black are also named.

Hollinger International Inc. is a U.S.-based organization that owns the Chicago Sun-Times, the Telegraph of London and the Jerusalem Post.

Black resigned as chief executive of Hollinger International last fall as the feud with its shareholders intensified. But he denied any wrongdoing, and called the departure a "retirement."

He was non-executive chairman of the company until being dumped Saturday, but he remains the controlling shareholder. He's also chairman of the parent firm Hollinger Inc., which is based in Toronto.

FROM NOV. 17, 2003: Conrad Black quits as Hollinger CEO

The lawsuit was filed in the U.S. District Court in New York on Friday but not made public until Saturday. It demands the repayment of allegedly diverted assets and various fees.

The suit calls on Black and Radler, an executive with Toronto-based Hollinger Inc., to refund all salaries and dividends they collected during the time period in dispute.

The legal claim was launched by a special committee of the Hollinger International board that reviewed payments made to the media baron.

"This litigation marks a substantial step towards returning to our shareholders the value that was inappropriately taken from this company," said Gordon Paris, chairman of the special board committee, in a statement released Saturday night.

Written by CBC News Online staff

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