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Newspaper mogul Conrad Black gets six-and-a-half years for fraud

CHICAGO (AP) — Former newspaper mogul Conrad Black was sentenced Monday to six-and-a-half 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," US 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.

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 US 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.

Black, currently staying at his estate in Palm Beach, Florida, on a $21 million bond, was given until March 3 to report to prison. St. Eve recommended the federal correctional center at Eglin AFB, Florida.

"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," US Attorney Patrick J. Fitzgerald told reporters.

Fitzgerald also was asked about the lighter-than-expected sentence.

"Mr. Black is going to jail as a convicted felon, convicted of fraud. So we proved the case," Fitzgerald said. "The bottom line is Mr. Black will do six-and-a-half years in jail. That's a serious amount of time."

Black left the courthouse without commenting.

Defiant to the end, he told the court his main regret as he faces prison was not what happened when he was running Hollinger but "the evaporation of $1.5 billion of shareholder value under my successors."

Often described as arrogant, he said the stock still was 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.

Black's wife, the conservative columnist Barbara Amiel Black, and daughter, Alana, sat in the first row of spectator seats as he was sentenced. Under federal law he must serve 85 percent of the sentence.

St. Eve said three 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 — which 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.

After sentencing Black, St. Eve began sentencing three co-defendants who were convicted with him, Canadian executives John Boultbee and Peter Atkinson and Chicago attorney Mark Kipnis.

They originally were charged with swindling shareholders out of an estimated $60 million by collecting payments from purchasers of Hollinger's US and Canadian newspapers. The payments were in exchange for promises not to return and compete with the papers' new owners.

In the end, Black was acquitted of nine of the counts against him, including racketeering, and convicted of siphoning off $6 million through bonuses disguised as such "non-compete" payments. Black also was convicted of obstruction of justice for removing documents from his offices.

Defense attorneys pleaded for lenience, showing letters from such celebrities as Sir Elton John, conservative writer and television personality William F. Buckley Jr., former Canadian Prime Minister Brian Mulroney and columnist George Will, describing Black as someone who had devoted much of his life to helping charities and those around him.

Black attorney Jeffrey B. Steinback urged St. Eve to be lenient, saying Black was not the arrogant figure he often has been depicted as and that at his age a long sentence would be "life without parole."

"An ember of hope sustains Conrad," Steinback said. "The calculations of the government are extreme and would extinguish that ember and I ask Your Honor not to do that."

But a shareholder, Eugene Fox, managing director of Connecticut-based Cardinal Capital Management, 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.

Attorney Andrew Frey, who has been hired to head the appeal effort, said he feels optimistic about Black's chances but added that the sentence, while shorter than what the government wanted, was daunting.

"For a 63-year-old man, six-and-a-half years is a lot of time to spend, especially if you don't feel you've committed a crime," Frey said.

Steinback quoted Elton John as calling Black "the sort of person who sticks with you through thick and thin" and George Will as saying Black had "an intense faith in the possibility of public improvement."

Lead prosecutor Eric Sussman acknowledged that many people believe Black, an accomplished biographer whose subjects have included Franklin D. Roosevelt and Richard M. Nixon, is an extraordinary man and that many people are guaranteed to ask "how could this have happened?"

"But the fact is he stands before the court convicted of stealing money from the company he founded," Sussman said.

"Unlike the bank robbers who walked into banks and stole money from people they didn't know, he stole money from people he did know," Sussman said. "What brought him here today was his own greed and disdain for the rule of law."