By THE CANADIAN PRESS
Conrad Black eked out a minor legal victory in a U.S. appeals court Friday as two of his fraud convictions were overturned due to a legal error, though a serious count of obstruction of justice and one other fraud charge were upheld.
Black was not acquitted on the overturned counts but the appellate judges did find an error “warranting — barely — a retrial,” judge Richard Posner wrote in a decision that came down exactly a month after the two sides made their arguments before the three-judge panel.
Prosecutors have not yet determined whether they will retry Black on the convictions that were overturned in a ruling by the 7th U.S. Circuit Court of Appeals in Chicago.
Black, who is currently free on bail, will be now be resentenced on the upheld convictions relating to a 2007 case in which he and several colleagues were convicted of defrauding investors of media company Hollinger International.
Although the defendants are entitled to a new trial on the overturned counts, “the entitlement is moot unless the government decides to retry them, ”Posner wrote in the judgement.
“The government may wish, instead in order to conserve its resources and wind up the protracted litigation, to dismiss the (overturned count) and proceed directly to resentencing.”
The U.S. Attorney’s office said it needs some time to decide whether it will retry Black on the convictions that were overturned Friday due to a legal technicality.
“We are pleased that the Court of Appeals affirmed the convictions on fraud and obstruction counts and we will make our further intentions known to the District Court at the appropriate time after we have studied the opinion carefully,” the office said in a statement.
But former U.S. prosecutor and white-collar crime expert Jacob Frenkel said it’s highly unlikely prosecutors will choose to retry Black, calling the judgement a victory for the government and a loss for Black because he was not found innocent of any of the crimes.
“It shows how firmly the 7th circuit believed that a fraud was committed,” Frenkel said. “I do not believe the government has any reason to retry it,” he said.
“It’s a final blow for Conrad Black… he was hoping to be able to walk away (Friday) and say: ’The United States appellate court says I have not committed any crime’. Now the (court) has said ’You obstructed justice and you committed fraud’.”
The court’s decision to uphold the one fraud count significantly increases Black’s chances of returning to jail.
If only the obstruction of justice count remained, Black could get away with time served on that count and return home to his wife, journalist Barbara Amiel, he added.
Black was released from a Florida prison three months ago to await the appeal court decision and is reportedly staying in his Palm Beach, Fla., mansion.
The 66-year-old has already served more than two years of a 6 1/2-year sentence, but Frenkel said there is a legal basis for justice Amy St. Eve to reimpose the same sentence she originally handed down.
Black is reportedly staying in his Palm Beach mansion after St. Eve prohibited him from leaving the country while on bail.
But he could return to jail as early as December when he next scheduled to appear for a bail status update, where the government could request for the judge to reconsider his bail, Frenkel said.
“The whole reason he was granted bail pending appeal was that on some level the trial court believed that all that may survive would be the obstruction count,” he said.
Frenkel noted that Black’s behaviour—including an admonition of the U.S. prison system in a Canadian newspaper— since his July release from jail could factor into St. Eve’s decision, and that would not fare well for his chances of freedom.
He predicted a final decision on Black’s fate will be handed down in the next month or so, meaning Black will either be home for the holidays or back in jail by Christmas.
The now defunct “honest services” legal argument has been used to convict politicians and corporate executives, including Black and Jeffery Skilling, the ex-chief executive of Enron.
The law had stipulated that U.S. citizens were entitled to honest service from government and private citizens, even when nobody suffered any loss. It holds that the definition of fraud includes a scheme to “deprive another of the intangible right of honest services.”
It has been criticized by defence lawyers for being vague and subjecting people to prosecution for mistakes and minor transgressions in the business and political worlds.
Black and other former Hollinger executives were convicted of diverting US$5.5 million that could have gone to the company, falsely claiming they were getting “non-compete” payments from buyers of Hollinger community newspapers in return for promises they would not return to compete with the new owners.
Black’s defence attorney Miguel Estrada argued last month that jurors gave too much weight to now-defunct honest services provisions in convicting Black of fraud and obstructing justice.
But prosecutor Edmond Chang said a simpler, undisputed legal notion underpinned arguments to jurors: that Black stole money.
The fraud count that sticks relates to payments to Black and his colleagues in connection with a sale of Hollinger community newspapers, and was upheld because the defendants admit that they failed to prepare legally binding contracts.
“The concession fatally undermines their challenge to the convictions on this count,” Posner wrote.
The judgement also applies to Black’s co-defendants — Peter Atkinson, John Boultbee and Mark Kipnis.
Atkinson and Boultbee, both Canadian executives of Hollinger, received two years and 27 months respectively. Chicago attorney Mark Kipnis, a former Hollinger employee, was placed on probation with six months of house arrest.
All four men were found not guilty on a majority of the fraud charges against them but convicted on others. Black was the only one charged with obstruction for removing boxes from his Toronto office, contrary to an Ontario court order, making his sentence significantly lengthier than that of his three co-defendants.
Black was head of the world’s third-largest newspaper empire in terms of circulation until he was ousted in 2003 following an internal investigation initiated by Black in response to shareholder complaints.
Hollinger once owned the Chicago Sun-Times, the London Daily Telegraph, the Jerusalem Post and hundreds of newspapers in the U.S. and Canada.
The Canada Revenue Agency is seeking C$3 million in back taxes from the former media baron, a case that Black is appealing on the grounds that the CRA was assessing him improperly as both a Canadian resident and non-resident.
Black has also being targeted by the IRS, the American tax collector, for about US$71 million in alleged unpaid taxes.
He is also suing his former business associates for libel in an Ontario court.