CHICAGO Former newspaper mogul Conrad Black was sentenced Monday 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 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 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 left the courthouse without commenting.
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.
Radler's testimony showed he was "equally culpable," St. Eve said
Black and Radler built Hollinger from scratch, starting with a tiny, money-losing, English language paper in French-speaking Canada, the Sherbrooke Record. In time, the company became an international colossus.
Black, Radler and three co-defendants were charged with siphoning money out of the company through payments made by buyers of Hollinger International community papers in return for promises not to compete with the new owners. Prosecutors said such payments should go to shareholders.
Radler pleaded guilty and made his deal with prosecutors while Black and his other co-defendants, Canadian executives Peter Atkinson and Jack Boultbee and Chicago attorney Mark Kipnis, demanded a jury trial.
They originally were charged with swindling shareholders out of an estimated $60 million by collecting payments from purchasers of Hollinger's U.S. 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.
After Black's sentencing, St. Eve sentenced his three co-defendants.
Atkinson was sentenced to two years and fined $3,000. Boultbee was sentenced to 27 months, ordered to pay $152,500 restitution and fined $500. Kipnis was placed on probation for five years with six months of house arrest; he was also ordered to perform 275 hours of community service. The three men were also ordered to share in the forfeiture.
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.
Steinback quoted John as calling Black "the sort of person who sticks with you through thick and thin" and Will as praising Black's "intense faith in the possibility of public improvement."
Sussman acknowledged that many people are impressed with Black, an accomplished biographer whose subjects include Franklin D. Roosevelt and Richard M. Nixon. He said they wonder "how this could 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 greed and disdain for the rule of law."