Conrad Black gets 6 1/2 years for fraud

updated 9:18 p.m. ET Dec. 10, 2007

CHICAGO - Former newspaper mogul Conrad Black was sentenced Monday to 6½ 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 that 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 the 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 6½ 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 left the courthouse without commenting.

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