A federal appeals court on Wednesday upheld Conrad Black's convictions of fraud and obstruction of justice, brushing aside his claim that he and three other former Hollinger International media executives did no harm to the company he once headed.
"They are making a no harm-no foul argument, and such arguments usually fare badly in criminal cases," a three-judge panel of the 7th U.S. Circuit Court of Appeals said in its 16-page opinion.
The appeals court rejected the request of the 62-year-old British baron, known as Lord Black of Crossharbour, and three other former Hollinger International executives for a new trial.
Black is serving a 6 1/2-year sentence at a federal prison in Florida.
He was convicted last July 13 of siphoning off millions of dollars belonging to Hollinger when he was chief executive officer of the company that once owned the Chicago Sun-Times, the Daily Telegraph of London, the Jerusalem Post and hundreds of community papers across this country and Canada.
He also was convicted of obstruction of justice for hauling 13 boxes of documents out of his Toronto office while knowing they were being sought as part of an investigation of his financial dealings.
The jury saw a videotape of Black carrying the boxes out of the offices, loading them into his car and driving away with them. Defense attorneys claimed he had no intention of thwarting the investigation and that he quickly returned the boxes.
"There was evidence that Black knew that the alleged frauds were being investigated by the grand jury and by the Securities and Exchange Commission," the appeals panel said.
The court rejected Black's appeal less than three weeks after it heard oral arguments in the case -- an unusually quick turnaround time.
U.S. Attorney Patrick J. Fitzgerald issued a statement expressing satisfaction that the appeals court acted "swiftly and conclusively."
"The court found clear evidence that all four defendants engaged in a brazen, multimillion-dollar corporate fraud scheme and deprived the shareholders of Hollinger International of their right to the executives' honest services," Fitzgerald said.
Black's attorney, Andrew Frey, recalled that at the June 6 oral argument, Judge Richard A. Posner had expressed sharp skepticism.
Frey said he was not surprised at the adverse decision in view of "the court's apparent hostility." He also said he was disappointed and that the decision had reflected "a number of factual misunderstandings."
"We are considering our options," said Frey, adding that it could include a request for a rehearing before the appeals court.
In its opinion, the court also upheld the convictions of two Canadian executives of Hollinger, John A. Boultbee and Peter Y. Atkinson, and the company's former Chicago-based attorney, Mark S. Kipnis.
The opinion, written by Posner, focused on a deal involving a Hollinger subsidiary, APC, which sold most of its newspapers and ended up owning just one weekly paper in Mammoth Lake, Calif.
Black and other executives got $5.5 million for agreeing not to compete with APC for three years after leaving Hollinger's employment.
"That Black and the others would start a newspaper in Mammoth Lake to compete with APC's tiny newspaper there was ridiculous," the court said.
The court also scoffed at a defense claim that the $5.5 million actually represented management fees that APC owed to the executives.
It said no company records were found to indicate that the money represented fees, even though "Hollinger is a large, sophisticated public corporation." It said the checks were backdated to the year when newspapers were being sold to make the deal "seem less preposterous."
All of Hollinger's big papers except the Sun-Times have now been sold and the company that emerged changed its name to Sun-Times Media Group.
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