Theories abound at Conrad Black fraud trial

By Staff
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CHICAGO, June 17 (Reuters) Federal prosecutors summing up their fraud case against Conrad Black today can offer the jury two theories to convict the former press baron: that he conceived and led a scheme to bilk millions from his company, or that he deliberately avoided knowing about it while filling his pockets.

Those two approaches are available because Judge Amy St Eve of US District Court in Chicago sided with prosecutors in agreeing to give jurors what is referred to in legal circles as the ''ostrich instruction.'' That means a defendant can be found guilty if he deliberately avoided learning about wrongdoing, even if the jury thinks he did not hatch the scheme.

That ''deliberate avoidance'' jury instruction is common in white-collar criminal cases, legal experts say.

''What it means is it gives the prosecutors a lot more options in arguing the case to the jury,'' said white collar criminal defense attorney Lee Dunst, who has been following the case.

''One, they can argue Mr Black engaged in intentional misconduct, and knew what was going on. Or, they can argue ... he deliberately closed his eyes to what was going on,'' Dunst said.

''The ostrich instruction is basically giving prosecutors a second bite of the apple,'' said Michael Levy, another white-collar defense attorney and former federal prosecutor.

Black and three other former executives at Hollinger International Inc are accused of pilfering 60 million dollar in so-called non-compete payments that rightfully belonged to the publishing giant and its shareholders.

The payments compensating Black and the others for agreeing not to compete against buyers of hundreds of publications that were being sold to pay off accumulated debt were essentially non-taxed bonuses they awarded themselves, prosecutors say.

''Prosecutors need to prove that Black had an intent to defraud, and in the absence of a 'smoking gun' e-mail, they have to prove that through circumstantial evidence,'' Levy said.

The defense, meanwhile, has tried to show that non-competition agreements are a common business practice, and were properly disclosed to Hollinger International's auditors and approved by its high-profile board of directors.

DISCREDITING WITNESSES Black's attorneys focused on discrediting prosecution witnesses led by his one-time partner of three decades, David Radler, who testified over a two-week period and pinned the scheme on Black.

Canadian defense attorney Edward Greenspan attacked Radler as a ''serial liar'' who would do anything to spare himself a long prison sentence. Radler's 2005 plea agreement with prosecutors called for him to testify and serve 29 months -- a term that will likely be shortened to as little as six months if served in his native Canada.

Neither Black nor the other defendants testified, though the voice of the flamboyant author and globe-trotting bon vivant was heard through numerous e-mails he wrote and in tape-recorded annual meetings where he tried to beat back the protests of restive shareholders.

Black, 62, and former chief financial officer Jack Boultbee, 63, also face charges they abused company perks by allowing Black to use a company jet on a South Seas vacation, buy a luxury New York condominium owned by the company, and use company funds to defray the cost of a surprise birthday party for Black's wife at an upscale New York restaurant.

If convicted on all 13 counts, including fraud, racketeering, obstruction of justice and causing Hollinger to file false tax returns, the Canadian-born Black could face decades in a US prison as well as millions of dollars in fines and millions more in forfeitures.

Boultbee and co-defendants Peter Atkinson and Mark Kipnis, both lawyers for the company, face lesser charges.

Black is trying to regain the Canadian citizenship he relinquished when he accepted the British title Lord Black of Crossharbour, awarded him when he owned the Daily Telegraph newspaper in London.

The Telegraph, along with the Jerusalem Post and the National Post in Canada that Black founded, have been sold off.

Hollinger International, which ousted Black, has since been renamed the Sun-Times Media Group .

REUTERS SW RN1850

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