Conrad Black, Three Others Are Charged in Fraud Case
By ELENA CHERNEY
Staff Reporter of THE WALL STREET JOURNAL
November 17, 2005 2:45 p.m.
Arrest warrants were issued in Chicago for press baron Conrad Black and three associates as federal prosecutors outlined a fraud scheme that involved two Park Avenue apartments, a corporate jet, a trip to the South Pacific and $51.8 million in payments to executives.
Charged along with Mr. Black, 61 years old, are Jack Boultbee, a former executive vice-president of Hollinger International Inc., Peter Atkinson, 58, also a former executive vice-president, and Mark Kipnis, 58, the Chicago-based newspaper company's former corporate counsel. Mr. Kipnis was charged with fraud in August along with former chief operating officer David Radler.
Mr. Radler, who cooperated with the prosecutors' probe into the other executives, agreed to a deal that would see him serve 29 months in prison.
Mr. Black and the others were accused of fraudulently diverting more than $32 million from the company through a complex series of transactions. The indictment also outlines fresh allegations, including what federal prosecutors described as the fraudulent diversion of an additional $51.8 million in 2000 from Hollinger International's sale of assets to CanWestGlobal Communications Corp.
U.S. Attorney Patrick J. Fitzgerald for the Northern District of Illnois said the 11-count indictment "demonstrates the Justice Department's continuing commitment to thorough investigations of all cases of corporate malfeasance."
The indictment isn't as broad in scope as an internal company probe last year, which alleged that Mr. Black and others diverted more than $400 million from the company. Civil-fraud charges filed by the Securities and Exchange Commission, also last year, related to $85 million allegedly diverted by Mr. Black and Mr. Radler.
At its peak, Chicago-based Hollinger owned hundreds of community newspapers in North America, in addition to London's Telegraph Group, the Jerusalem Post and the Chicago Sun-Times.
Mr. Black was ousted as chairman and CEO of the newspaper publishing company two years ago after a shareholder revolt over payments to him. A board committee probe found he and others, including Hollinger Inc., a Toronto-based holding company through which Mr. Black holds his Hollinger International shares, had accepted $32 million in payments that were never authorized by the board.
Part of the challenge for prosecutors, legal experts say, is that unlike in most of the big corporate scandals, at Hollinger the board approved most of the transactions that resulted in $400 million of alleged questionable payments to executives and other companies they control.
Write to Elena Cherney at elena.cherney@wsj.com3
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