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Former Hollinger International General Counsel, Mark Kipnis, the sole U.S. lawyer convicted in the financial fraud that took down newspaper magnate Conrad Black, emerged from his federal sentencing in Chicago without prison time or a fine. U.S. District Judge Amy St. Eve sentenced Kipnis, who was on duty when three other executives siphoned tens of millions of dollars from the company, to five years probation and six months of home detention. While noting that he had engaged in a “serious offense,” she determined that he had suffered significant losses already and gained little from the scheme. “Any prison sentence would undermine respect for the law,” St. Eve said in sentencing Kipnis, noting that he was the “perfect candidate” for community service. She ordered him to devote 275 hours to such work. Not ‘calling shots’ St. Eve could have sentenced him to as much as 37 months in prison after finding him culpable for $5.5 million of Hollinger losses in the fraud, but she said Kipnis was differently situated in the crime. Kipnis wasn’t “calling the shots” and had cooperated with a Hollinger committee investigating the fraud, St. Eve said. She also took into account the statement by former Hollinger President David Radler, a key witness for the prosecution, that $150,000 Kipnis received was a bonus, not a payoff for the scheme. Kipnis, Black and former Hollinger executives John Boultbee and Peter Atkinson were convicted after a four-month long jury trial in which prosecutors from the U.S. Attorney’s Office in Chicago argued that the executives used non-compete agreements tied to companies that Hollinger sold to steal money from shareholders. The federal prosecutors said Kipnis signed off on the non-compete agreements and enabled the other executives to illegally line their pockets. Black was convicted of three counts of mail fraud and one count of obstruction of justice while the others were convicted of three counts of mail fraud. Black received a six-year term. Atkinson was dealt a 24-month prison term, and Boultbee received 27 months. Kipnis was acquitted by St. Eve of one count. Hollinger, now called Sun-Times Media Group Inc., once owned the Jerusalem Post and the Daily Telegraph of London in addition to the Chicago Sun-Times. All of the other convicted executives were sentenced to prison time on Monday before the sentencing of Kipnis. Kipnis, 60, told the judge that the employees and shareholders at the company “deserved more from me and I didn’t give it to them.” Still, he said he and his family had already endured the “worst two years of my life,” and he had lost the ability to practice law, which he missed “terribly.” He and his wife also lost their savings, leaving them to operate a sign business. “Our lives have been and will be irrevocably changed,” Kipnis said. Ted Rilea, the vice president of labor relations at the Sun-Times, appeared at the hearing and asked the judge for leniency with the blessing of the company’s current general counsel, James McDonough. Rilea also last week delivered to St. Eve a petition signed by 100 Sun-Times employees who supported Kipnis. After the trial, Kipnis said he was thankful for his lead lawyer Ronald Safer, the managing partner of Schiff Hardin in Chicago, and the lawyers at Schulte Roth & Zabel who represented him. “I was never a client. It was a mission for them,” Kipnis said. Safer was still not satisfied, saying he should have been able to persuade the jury of Kipnis’s innocence. His client could appeal the conviction and is weighing the decision, Safer said. “The danger is that if we appeal, the government will appeal his sentence,” Safer said in an email response. “Although we should prevail, I am not sure we want to risk it.” Kipnis must still contribute, along with the convicted executives, to the forfeiture of some funds and pay a $200 federal prosecution fee. Randy Samborn, a spokesman for the U.S. Attorney’s office, declined to comment on the outcome.

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