Black indicted on more U.S. charges

Jury adds racketeering, three other counts

December 16, 2005|By MICHAEL HIGGINS | MICHAEL HIGGINS,CHICAGO TRIBUNE

CHICAGO -- A federal grand jury added racketeering and three other charges yesterday to its $84 million fraud case against former press baron Conrad Black, alleging that he ran his media empire as a criminal enterprise.

The new indictment contends that Black's alleged self-dealing and abuse of company perks while running Hollinger International Inc. constituted a pattern of racketeering activity that ran from 1998 to 2002.

The purposes of the criminal enterprise included "enriching Black, his associates, and their entities at the expense of [the company] and its public, majority shareholders," said the U.S. attorney's office.

Black's lawyer, Edward Greenspan of Toronto, issued a statement denouncing the racketeering charges as "a blatant example of overreaching by the prosecutor." He said there have been many, larger white-collar prosecutions in which no racketeering charges were brought.

"These latest allegations add nothing new to the indictment and ... they will be demonstrated to be unfounded," Greenspan said.

If proven in court, the racketeering charge would give prosecution more leverage to confiscate Black's assets, legal experts said. The new indictment seeks to force Black to forfeit more than $92 million.

"It's just a much more ominous kind of indictment, when you're being charged with racketeering," said Mark Flessner, a former federal prosecutor now in private practice in Chicago. "They're shooting with the very big guns."

The indictment also charges Black with obstruction of justice, alleging that on March 10, Black and two assistants sneaked into his corporate offices in Toronto after hours and removed 13 boxes of documents sought by authorities.

Greenspan said those acts were not a matter for the criminal courts.

"The events that led to the removal of certain boxes [in] ... Toronto have been thought of, in Canada, as a possible civil contempt," Greenspan said. "This is a further example of overreaching by the prosecutor."

The indictment also adds new charges of wire fraud and money laundering, in which prosecutors allege that Black illegally used $2.15 million from the sale of Hollinger International's newspapers to help him buy a second-floor apartment on Park Avenue in New York.

The indictment adds one new fraud count against John Boultbee, Black's former chief financial adviser. Boultbee's attorney, Patrick Tuite, could not be reached for comment.

The previous charges against Black and other top associates remain in place. In indictments last month, prosecutors alleged that Black and other company insiders siphoned off millions of dollars in improper "non-compete" agreements and other side deals as Hollinger International periodically sold off newspapers, beginning in the late 1990s.

Black and Boultbee also abused corporate perks for Black's benefit, according to the charges.

Black, former chairman and chief executive of Hollinger International, which owns the Chicago Sun-Times and other newspapers, pleaded not guilty to the original charges and is free on a $20 million bond.

He, Boultbee and co-defendant Mark Kipnis are to be arraigned on the new indictment today before U.S. District Judge Amy St. Eve, the U.S. attorney's office said.

Michael Higgins writes for the Chicago Tribune.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.