CHICAGO - Former Canadian media tycoon Conrad Black and two of his long-time business associates should forfeit nearly US$17 million for their role in defrauding Hollinger International investors, the U.S. Attorney's office demands in documents filed Monday.
In documents filed with the U.S. District Court in Chicago, the prosecution team said the government was seeking to hold Black, Jack Boultbee and Peter Atkinson jointly liable for the "U.S. community newspaper fraud scheme.''
Black, once the head of the Hollinger newspaper empire that stretched around the world, was convicted of three counts of fraud. Boultbee, Atkinson and former Hollinger International general counsel Mark Kipnis were also convicted of three counts of fraud involving the same transactions.
Black was also convicted of one count of obstruction of justice, related to the removal of several boxes from his former headquarters office in Toronto. He faces up to 30 years in prison and substantial financial penalties.
Judge Amy St. Eve has scheduled a sentencing hearing for Nov. 30. All four men have been released on bail, although Black isn't allowed to leave the United States and his right to travel has been restricted.
Defence lawyers have argued that Black's sentence will be well below the government's estimates because he was acquitted of nine of the 13 counts against him, meaning the fraud only amounted to $3 million -- not the $60 million Black and three other defendants were initially charged with.
However, the prosecutors' filing argues "courts have repeatedly recognized that a forfeiture judgement can and should include the proceeds of the entire scheme, regardless of whether the jury has acquitted the defendants of some counts within that scheme.''
In particular, the prosecution argues that the standard at sentencing, including determining the amount of forfeiture, is less strict than required for a conviction.
Instead of the prosecution being required to prove its case "beyond a reasonable doubt,'' it will be up to the court to make its decision based on "a preponderance of the evidence that defendants engaged in a $32-million fraud scheme (of which the government now seeks forfeiture of $16.95 million.)
In addition to the money, the government is seeking forfeiture of specific property "derived from proceeds traceable'' to the mail fraud.
In particular, the government says Black should received nearly US$7.2 million in fraudulent payments between Nov. 21, 2000 and April 9, 2001 and used money from the same account to pay for expenses related to a New York apartment and a beach-front mansion in Palm Beach, Fla.
The brief also says Black can't argue that funds used for expenditures on those properties came from legitimate payments, such as non-compete fees received in the sale of Hollinger's major Canadian papers to CanWest Global Communications.
"Black does not have the benefit of such an argument when his fraud proceeds are commingled with legitimate funds,'' the brief says.
Black's legal team is preparing appeals of the four counts on which he was convicted.
