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The Honolulu Advertiser
Posted on: Tuesday, December 11, 2007

Newspaper mogul Conrad Black going to prison

By Mike Robinson
Associated Press

Hawaii news photo - The Honolulu Advertiser

Conrad Black leaves the federal building after sentencing.

JERRY LAI | Associated Press

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CONRAD BLACK'S DAY IN COURT

MODEST SENTENCE: Fallen media baron Conrad Black was sentenced yesterday to 6 1/2 years in prison — the minimum time recommended under federal sentencing guidelines and less than prosecutors sought — after being convicted in July of swindling shareholders in his Hollinger media empire out of $6 million. He also was fined $125,000 and ordered to pay part of $6.1 million in restitution.

UNREPENTANT: Black did not apologize in brief remarks to the court and said his main regret was not what happened when he was running Hollinger but "the evaporation of $1.5 billion of shareholder value under my successors."

FLORIDA LOCKUP? U.S. District Judge Amy J. St. Eve gave Black until March 3 to report to prison and recommended the federal correctional center at Eglin Air Force Base in Florida. But officials said the Eglin facility has been closed.

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CHICAGO — Former newspaper mogul Conrad Black was sentenced yesterday to 6 1/2 years in prison, far less than sought by prosecutors, for swindling shareholders in his Hollinger media empire out of $6 million.

"Mr. Black, you have violated your duty to Hollinger International shareholders," U.S. District Judge Amy J. St. Eve told the silver-haired millionaire member of the British House of Lords known throughout the newspaper industry for his lavish lifestyle and flamboyant use of words.

Black also was fined $125,000 and ordered to pay part of $6.1 million in restitution.

Prosecutors had asked for as many as 30 years in prison for the Canadian-born Black, saying he had not shown "one shred of remorse" for looting the company that once owned the Chicago Sun-Times, Daily Telegraph of London, Jerusalem Post and hundreds of U.S. and Canadian community newspapers.

"Obviously, there's a great deal of relief" at the lighter-than-expected sentence, said Black attorney Jeffrey B. Steinback, who delivered a passionate, hourlong appeal for leniency.

Before the sentencing, lead prosecutor Eric H. Sussman urged St. Eve to impose a stern sentence as a warning to other potential corporate criminals and because Black had not "shown one shred of remorse."

Defiant to the end, Black told the court that Hollinger's stock was still in double digits when he was removed as chairman and suggested its current value of less than $2 a share was the fault of those who came after him.

"I do wish to profess my profound regret and sadness at the severe hardship of all the shareholders at the evaporation of $1.8 billion in shareholder value under my successors," Lord Black of Crossharbour said.

But a shareholder, Eugene Fox, managing director of Connecticut-based Cardinal Capital Management Co., gave a victim-impact statement urging St. Eve to punish Black in a way that would warn other executives not to defraud shareholders. He said Black showed contempt for shareholders.

"He called us idiots and greedy fools," Fox said.

Reporters asked U.S. Attorney Patrick J. Fitzgerald if he was satisfied with the length of the sentence.

"Mr. Black is going to prison a convicted felon, convicted of fraud," Fitzgerald said. "So we proved the case. The bottom line is Mr. Black will do 6 1/2 years in jail. That's a serious amount of time."

St. Eve rejected a request from prosecutors to have Black locked up immediately and gave him until March 3 to report to prison. At Steinback's request, she recommended the federal correctional center at Eglin Air Force Base in Florida, not far from the Palm Beach estate where Black has been living while out on $21 million bond.

"Mr. Black will be moving from Palm Beach to Eglin, and anyone who has ever heard of either one knows that's a serious change in life conditions," Fitzgerald told reporters. Within an hour of the sentencing, though, officials said the Eglin correctional facility requested by Black had been closed and another correctional facility would have to be found.

Black's attorneys said that with Eglin not an option, the federal prison at Coleman, Fla., would be the best choice.

St. Eve said several factors led her to impose a sentence of just 78 months.

She rejected a claim by prosecutors that Black should be held responsible for $32 million in shareholder losses. She held him responsible for $6 million — a key calculation that lowered the potential sentencing range.

St. Eve also said Black's sentence should be closer to that of F. David Radler, his former business partner, who became the government's star witness at the four-month trial. Under a plea agreement with prosecutors, Radler will get a 29-month sentence and $250,000 fine. Radler also is expected to serve much of his time in a Canadian prison, where sentences for nonviolent offenders often are cut down further.