Criminal charges 'just around corner' for fallen media mogul

Conrad Black

NEW YORK - Conrad Black, named in a raft of civil suits and forced out of the company he built into one of the world's leading newspaper groups, has avoided criminal charges. But that may be about to change.

Legal experts say US fraud charges filed last week against two of Black's former deputies - and the decision by one to work with prosecutors - have significantly raised the chances the ex-chief executive of Hollinger International and newspaper baron will soon be indicted.

"I would say an indictment is right around the corner," said Charles Ross, head of white-collar criminal practice group at Herrick, Feinstein in New York.

Ross said that if he were representing Black, a member of Britain's House of Lords who resigned from Hollinger International in 2003, he would work under the assumption that prosecutors view him "as the target of the investigation".

"They are definitely coming for him," Ross said.

While Hollinger International began a fraud probe of Black and others nearly two years ago, US authorities did not bring criminal charges related to the case until the two deputies were indicted.

David Radler, ex-president and chief operating officer of Hollinger, in-house lawyer Mark Kipnis and Ravelston, Black's insolvent Toronto-based holding company, were charged in a seven-count indictment that they cheated investors out of US$32 million ($46 million).

Chicago US Attorney Patrick Fitzgerald said Radler was co-operating with prosecutors and was expected to plead guilty, but sidestepped the issue of Black, who was not mentioned by name in the indictment.

Black, through a spokesman, declined to comment on the case.

The once talkative media mogul, who has sparred with News Corp's Rupert Murdoch and former Canadian Prime Minister Jean Chretien among others, has fallen silent as complicated lawsuits, including one by the US Securities and Exchange Commission, unfold.

After his empire began unravelling, Black said he would make a comeback, blaming his troubles on "corporate governance terrorists".

Last Thursday, after announcing the indictments of Radler and Kipnis, Fitzgerald avoided mentioning Black even though reporters pressed him with questions.

If Black were indicted he would join a string of high-profile executives charged in recent years with cheating shareholders, including WorldCom's Bernard Ebbers, Adelphia's John Rigas, Tyco's Dennis Kozlowski and Enron's Kenneth Lay. All were convicted except Lay, who has yet to stand trial.

Criminal charges would further tarnish the legacy of Black, who built the world's third-largest newspaper empire out of a small investment in Canadian weeklies in 1967.

His reach extended as far as the Middle East and Europe, as he took control of flagship titles including the Jerusalem Post and London's Daily Telegraph.

Black quit under pressure as Hollinger International's chief executive in November 2003. His former company later accused him and others of operating a "corporate kleptocracy" that siphoned off hundreds of millions of dollars.

After announcing last week's indictments, Fitzgerald said: "Sadly, the indictment charges that the insiders at Hollinger ... made it their job to steal and conceal."

Conrad Black

* Conrad Black built the the world's third-largest newspaper empire out of a small investment in Canadian weeklies in 1967.
* His reach extended as far as the Middle East and Europe, as he took control of flagship titles such as London's Daily Telegraph.
* Under pressure, he quit as Hollinger International's chief executive in November 2003.
* His former company has accused him and others of operating a "corporate kleptocracy".

- REUTERS