Closing arguments made in Black fraud case
A federal prosecutor ripped into media mogul Conrad Black and other Hollinger International executives today, saying “they systematically stole €44m” from the shareholders and created a phoney paper trail to cover their tracks.
“It will be your job to expose this cover story for the lie that it is,” Assistant US Attorney Julie Ruder told jurors as closing arguments got under way at Black’s three-month racketeering and fraud trial.
“We’re not here because somebody made a mistake, we’re not here because somebody forgot to dot the 'i's or cross the 't's,” Ruder said as Black looked on without any sign of emotion. She said the four defendants “decided on their own to take a slice of the company’s profits.”
Black, 62, and three other former executives of the Hollinger International Inc. newspaper empire are accused of pocketing 60 million that should have gone to the shareholders, largely through the sale of hundreds of Hollinger-owned US and Canadian community newspapers.
Millions of pounds were paid in exchange for promises that Hollinger would not come back to the circulation areas of the papers to compete with the new owners. Such “non-compete” payments are common in the newspaper industry but prosecutors say the money belonged to shareholders.
Hollinger did get the bulk of the money, but much of it also went to Black and other executives as well as two Canadian companies he owned.
Also on trial are former Hollinger vice presidents John Boultbee and Peter Atkinson and former corporate counsel Mark Kipnis. Like Black, Boultbee and Atkinson are Canadians. Kipnis is a Chicago lawyer.
Black, Boultbee and Atkinson shared the non-compete payments, which are tax free in Canada. Kipnis is accused of helping to arrange the deals.
Black and his co-defendants deny they did anything illegal.
US District Judge Amy St Eve has set aside the entire week for closing arguments; jury deliberations are expected to start next week.
Ruder paced in front of the jury box, sometimes pointing to a large video screen where prosecutors projected black-and-white photos of the witnesses when she mentioned them. Also projected on the screen in green letters were specific quotes from testimony given by the witnesses.
Ruder accused Black and his co-defendants of deceiving Hollinger International’s board of directors, its lawyers and its accountants by claiming that the buyers insisted that individual executives signing non-compete payments. Several buyers testified they did not care whether Black and the other Hollinger executives signed such agreements.
The defendants concealed that fact, she said.
“They chose not to tell the truth about why the payments were being made,” she said. “They chose to lie.”
Ruder said the non-compete payments were an ideal way to siphon money out of the company and make it look as if there was a good reason for it.
Turning to the defense table and pointing at Black, she said: “It’s a pretty easy way for people who know how the system works to use it as part of a cover story.”
