Conrad Black Charged with Racketeering and Obstruction of Justice
woah!
Conrad Black Charged with Racketeering and Obstruction of Justice
By Tara Perkins
CBC News
Thursday 15 December 2005
Toronto - The US Attorney's Office in Chicago upped the ante in
its case against Conrad Black, dealing out new federal charges
Thursday including allegations the former media mogul was involved in
racketeering.
The 61-year-old Black was hit with four new charges in total.
They collectively add 55 years to the potential 40-year jail sentence
Black was already facing if convicted on eight counts of fraud.
The new counts are racketeering, obstruction of justice, money
laundering and wire fraud. They stem from Black's time at the helm of
Chicago-based newspaper publisher Hollinger International Inc., owner
of the Chicago Sun-Times and former proprietor of the London
Telegraph, Jerusalem Post and other publications in the United
States, Canada and abroad.
Black pleaded not guilty to the eight fraud counts at the
beginning of this month. He is scheduled to appear in a Chicago court
Friday morning to face the additional charges, which were laid by
Patrick Fitzgerald, the US Attorney for the Northern District of
Illinois.
Racketeering charges, under the US Racketeer Influenced and
Corrupt Organizations act, known as RICO, are rare, said former US
federal prosecutor Marc Mukasey, who was trained by Fitzgerald.
They were created as a tool to fight traditional organized crime
such as the Mafia and foreign drug cartels.
Under the racketeering count against Black, Fitzgerald is
seeking forfeiture of more than $92 million US.
He alleges that Black was the leader of Hollinger, a company
which between 1998 and 2002 was operated through a pattern of frauds.
"What he's saying is that Black used his company as a
racketeering enterprise," Mukasey said.
According to the US Attorney's office, the purpose of the
Hollinger enterprise included:
"Enriching Black, his associates, and their entities at the expense
of (Hollinger) International and its public, majority
shareholders. . .(and) Canadian tax authorities."
"Promoting and maintaining Black's control over the Hollinger
Enterprise's affairs."
"Concealing fraudulent activities of, and the fraud proceeds received
by Black, his associates and their entities."
The obstruction count against Black, who lives in Toronto,
alleges that Black illegally took more than a dozen boxes out of the
Toronto office of Hollinger Inc., at 10 Toronto Street, the company's
then headquarters near the Bay Street financial district.
A Canadian court had ordered that no documents be removed from
the building without court permission. In addition, Black was
notified on May 19 that the US Securities and Exchange Commission was
looking for some documents, according to the allegations.
At about 5 p.m. on May 20 - three hours after his assistant was
thwarted in an attempt to take some boxes and put them in her car -
Black showed up at the office building and helped remove the boxes,
the US Attorney's Office said.
The charges of money laundering and fraud allege that Black
illegally transferred $2.15 million US in fraudulent proceeds from
his Canadian account to Hollinger's Chicago bank account to buy a New
York apartment on Park Avenue from the company.
Thursday's indictment, which supersedes the earlier charges,
also added one new count of wire fraud to the eight counts that co-
defendant and former Hollinger executive John Boultbee was facing.
The B.C. resident pleaded not guilty to the original eight
counts earlier this month and was released on a $1.5 million bond,
the week after Black was freed on $20 million US bail.
Boultbee and former Hollinger lawyer Mark Kipnis are both also
scheduled to appear in the Chicago federal court Friday morning.
Toronto-resident Peter Atkinson, another co-defendant, has been
excused from appearing because of a previously scheduled trip to Italy.
All of the defendants are accused of participating in a scheme
to divert more than $80 million US from Hollinger into its executives
pockets.
Black and Boultbee are also accused of letting Black misuse
company perks, by using the corporate jet for a personal trip to Bora
Bora and having Hollinger pay tens of thousands of dollars for his
wife's birthday party.
Meanwhile, David Radler, the 63-year-old former publisher of the
Chicago Sun-Times and chief operating officer of Hollinger
International, pled guilty in September to one count of fraud.
Black's former top executive, Radler is co-operating with US
authorities in the case.
Convictions of high-profile white-collar criminals have been
mounting in the United States, as regulators try to reassure
investors and wipe up the image of corporate America that was
tarnished by major frauds including Enron Corp.'s collapse in 2001.
Former WorldCom CEO Bernard Ebbers was sentenced to 25 years in
prison for his role in an $11 billion US accounting fraud. Tyco
International Ltd.'s former chief, Dennis Kozlowski, and CFO, Mark
Swartz, were convicted in June on 22 of 23 counts of grand larceny,
conspiracy, securities fraud and falsifying business records.
Adelphia Communications Corp. founder John Rigas, and his son
Timothy, were convicted last year of fraud and sentenced to 15 and 20
years respectively. And home diva Martha Stewart's well-known stock
trades landed her in prison for five months, with an additional five
months of home confinement.
Enron's founder, Kenneth Lay, is scheduled to stand trial in
January on fraud and conspiracy charges. The company's former CFO,
Andrew Fastow, has already agreed to serve the maximum 10-year
sentence for his part in the conspiracy, and to testify against his
former bosses.