KEY POINTS:
Conrad Black, the former Hollinger International chairman convicted of mail fraud and obstructing justice, has been sentenced to 6 1/2 years in prison, about a quarter of the maximum originally sought by prosecutors.
Black, 63, led Hollinger for eight years as chairman and chief executive officer. He quit
as CEO in 2003 after an internal probe found he and other executives got more than US$32 million ($40.9 million) in unauthorised payments.
He was fired as chairman two months later and convicted in July of directing a US$6.1 million fraud.
"You violated your duty to Hollinger International shareholders," US District Judge Amy St Eve told Black yesterday in Chicago federal court. "I frankly cannot understand how someone of your stature, at the top of the media empire, could engage in the conduct you engaged in."
Black was ordered to return the US$6.1 million and pay a US$125,000 fine.
His conviction stemmed from a federal crackdown on corporate crime that followed the 2001 collapse of Enron Corp. Juries convicted several ousted CEOs of fraud, including Enron's Jeffrey Skilling, WorldCom Inc's Bernard Ebbers, Tyco International's L. Dennis Kozlowski and Adelphia Communications Corp's John Rigas.
"I do wish to express very profound regret and sadness" for Hollinger investors, Black told St Eve yesterday. The judge sentenced him to the minimum prison term under the law, using the same guidelines that will govern the sentence of F. David Radler, the chief US witness against Black and his former partner.
The judge allowed Black to remain free on bail until March 3, when he is to report to prison. St Eve originally granted a request that she recommend he serve his term at a low-security facility at Eglin Air Force Base in Florida and rejected a US bid to seize his Palm Beach, Florida, home or the sale proceeds of his New York apartment.
When the judge learned Eglin had closed last year, she substituted a low security prison near Coleman, Florida.
"To end up where we ended up is a lot better than where we started," Black's lawyer Edward Greenspan said after the hearing. "What is left is going to be appealed."
Black declined to comment as he exited the courtroom. Chicago US Attorney Patrick Fitzgerald said the prison term was "a serious amount of time".
Assistant US Attorney Eric Sussman yesterday argued against leniency before sentencing.
"Black and his co-defendants nakedly stole money," he argued. "What brought him here today is his own greed."
Convicted with Black were former Hollinger vice-president Peter Atkinson, ex-chief financial officer John Boultbee, and former general counsel Mark Kipnis. Atkinson was sentenced to two years in prison and three years' probation. Boultbee was sentenced to 2 1/4 years in prison, three years' probation and US$152,500 restitution.
Kipnis was sentenced to six months of house arrest and five years of probation. He also was ordered to perform 275 hours of community service.
As part of his plea bargain, Radler is to be sentenced December 17 under more lenient 2000 federal guidelines. St Eve said fairness required that Black be sentenced under the same rules.
- Bloomberg
