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CHICAGO, March 21 � Illinois attorney Mark Kipnis is nothing like the media magnate Conrad Black who is sitting 10 feet away from him in the Chicago federal courtroom where they are on trial over fraud charges, an attorney for Kipnis said in his opening statement to the court. Schiff Hardin attorney Ronald Safer, formerly chief of the U.S. attorney’s criminal division in Chicago, painted a picture of Kipnis as a family man who has one home in suburban Northbrook, Ill., unlike the jet-setting Black who had homes in Toronto, New York, London and Palm Beach, Fla. He said that Kipnis was an “outsider” among the four former Hollinger executives on trial and that he probably only had five conversations with Black. “You will see that Mark was an honest man doing the best he could with the information that he had,” Safer said repeatedly in his opening statement. The U.S. government contends that Kipnis was a critical piece of the Hollinger mail and wire fraud scheme that illegitimately shifted $60 million in Hollinger public shareholder money to the executives through non-competition agreements that were attached to the sale of Hollinger chain newspapers in the 1990s. Under the agreements, Hollinger paid the executives to ensure they didn’t set up competing businesses against the buyers of mainly U.S. newspapers that Hollinger was selling off. The government doesn’t allege that Kipnis got any payments as part of the non-competition agreements, only that he helped facilitate them and got a $150,000 bonus for orchestrating the scheme. The charges were first brought against Kipnis and former Hollinger President David Radler in August 2005, with Black, Peter Atkinson, a Canadian lawyer, and John Boultbee, indicted later that year. Radler pleaded guilty and agreed to testify against the other four defendants. Black, Atkinson and Boultbee are also charged with illegally taking company perks, including trips on the Hollinger plane, that pushed the total damage to the company up to $84 million. Kipnis, 59, was a vice president, corporate counsel and secretary at Hollinger in Chicago who worked on some of the newspaper sale transactions at issue in the trial and on documents the U.S. Securities and Exchange Commission requires for the disclosure of executive compensation at publicly held companies. He is not charged with receiving illegal perks or with obstruction of justice, as is Black. Prosecutor Jeffrey Cramer in his opening statement Tuesday said that Kipnis had worked at a “well-known” Chicago law firm before joining Hollinger. Kipnis had been mainly a real estate attorney at the firm, Holleb & Coff, Safer said. Holleb & Coff dissolved in mid 2000. Kipnis became a sole practitioner in the city after leaving Hollinger in November 2003. Kipnis took the job at Hollinger in 1997 after getting a call from a friend at the company who was resigning from the post. Kipnis wasn’t a lawyer trained in financial securities matters and other Hollinger executives, including Atkinson, assured Kipnis that he didn’t need to be such a specialist because the company farmed out much of that work to its outside law firms, Safer said. Still, part of the reason that Kipnis got what Safer argued was a legitimate $150,000 bonus was for his work in sending less of his legal work to outside firms and doing more of it himself. Safer showed the courtroom a chart with a list of employees who received, or were slated to receive, bonuses ranging from $20,000 to $200,000. “He got that money for hard work,” Safer said. Oversight by Kipnis stretched across just the Chicago area newspapers, including the Chicago Sun-Times, not over Black’s international publishing empire that included the Jerusalem Post, the National Post in Toronto and the Daily Telegraph of London, Safer said. An average day for Kipnis was filled with work on service and distribution contracts, leases and employee benefits, with the non-competition agreements making up just a tiny slice of the job, his lawyer said. To the extent that Kipnis signed off on documents related to the non-competition agreements, he was seeking to properly disclose payments that were made to the company in connection with various newspaper sales, Safer said. While the government characterized Kipnis as all too happy to sign off on the shady payments, Safer said that Kipnis was actually the one with an “anti-fraud pen,” trying to disclose as much as possible to Hollinger’s audit committee and others. Kipnis may have missed some things, such as one document that showed those payments going to individuals, but he didn’t try to hide them, Safer said. Those were honest mistakes without the cheating intent that is the basis for fraud, he argued. “Being wrong in talking to the board is not against the law,” Safer told the court. Professionals at international firms that Hollinger hired to review those documents, including the Canadian law firm Torys and the accounting firm KPMG International, also missed those red flags as did the company board audit committee members, Safer said.

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