The U.S. Supreme court set aside three of Black’s convictions of mail fraud convictions and sent them back to a lower court on the basis that a law used to convict Black of fraud — and others of white collar crimes — was too broad.
It has left ultimate resolution of Black’s case to an appeals court, which means his fraud convictions still stand until dealt with there.
Black is likely to gain some satisfaction from the ruling but the fraud convictions are the least of his worries, said Chicago lawyer Andrew Stoltmann, who closely watched Black’s trial but a fourth conviction for obstruction of justice will keep him behind bars.
“I don’t think he’s going anywhere any time soon,” Stoltmann said in a telephone interview.
“The fact that he’s convicted on the obstruction of justice charge is a horribly bad fact for him. I think he’s going to get some time shaved off of his sentence but the entire conviction will not be overturned.”
The Black ruling was handed down alongside a ruling on former Enron CEO Jeffrey Skilling that found fault with the application of the federal “honest services” fraud law.
Black’s defence objected to the way the jury was instructed during the trial about the honest services law: his lawyers contended that it was impossible to determine what supported the jury’s verdict.
In the case against Skilling, the court vacated his convictions “on the ground that the honest services component of the federal mail fraud statute criminalizes only schemes to defraud that involve bribes or kickbacks.”
“That holding renders the honest services instructions given in this case incorrect,” the Supreme Court justices said in the ruling on Black’s convictions.
Critics have said the U.S. law on honest services fraud is vague and has been used to make a crime out of mistakes and minor transgressions in the business and political world.
James Morton, a Toronto lawyer who followed the case, said the Supreme Court rulings mean that prosecutors will now have to prove someone was bribed or given a kickback to convict them of failing to provide honest services.
“That was never argued in Black’s case and, in fairness, not in Skilling’s either.”
“I imagine they will probably go after Skilling again because Enron is still a huge issue in the United States. I would not be at all surprised if they give up on Black.”
Legal representatives for Black issued a statement Thursday saying the courts reinterpretation of the “honest services” statute now reflect arguments his counsel made last December.
“Given that the jury already decisively rejected the government’s attempt to convict Mr. Black for ’traditional’ fraud, we are confident the lower courts will quickly conclude that the errors that the Supreme Court has now conclusively found tainted every aspect of this case,” they said in a statement.
“We look forward to helping Mr. Black regain his freedom.”
Although Black has long been one of Canada’s best-known businessmen and his trial was a major news story in his former home and in Britain where he published one of the country’s prestigious newspapers, his trial received relatively little attention in the United States where the criminal case was fought.
He was originally charged with more than a dozen criminal allegations, most accusing him or his associates of siphoning millions of dollars away from the publicly traded company and to themselves or private companies they controlled.
However, after a months-long jury trial in Chicago, Black and his co-accused were convicted on only three of the fraud counts against them. Black was also convicted of obstruction of justice but he was found not guilty by the jury on most of the counts against him.
Eric Sussman, a former U.S. prosecutor who led the government’s case against Black and the other Hollinger executives at trial, said Thursday that it will be up to the appeals court to sort out whether the outcome of the trials would have been different under the Supreme Court’s interpretation of the law.
The obstruction of justice conviction by itself will probably keep Black in jail, Sussman told BNN, a specialty business-news cable channel.
In addition, the fraud convictions involved not just “honest services” but also more traditional mail and wire fraud, which are applied when the alleged crime involves communications across state lines.
“I think what you’re going to hear is the 7th Circuit (appeal court) will say, OK well, even if he’s not convicted of honest services, the conviction with respect to mail and wire fraud will still stand,” Sussman said.
“It means, he’s convicted of one less crime but will likely still serve the same amount of time in jail.”
If Black were to be released early, it wouldn’t necessarily mean a triumphant return to his powerhouse role in Canada’s media industry, a position he held long ago.
Black’s Hollinger empire has since crumbled and he’s sold off its sprawling homes to help pay debts. The 65-year-old would also have to reapply to live and work in Canada after his citizenship was renounced when he was made a Lord in Britain.