CHICAGO Facing his darkest day in court, Conrad Black evaded the harshest extent of the law yesterday thanks to a moderate judge and a few key legal victories.
Judge Amy St. Eve rejected calls from prosecutors to virtually bankrupt Lord Black and lock him away for the rest of his life for fraud and obstruction of justice.
Instead, the judge imposed a sentence of 6½ years and ordered Lord Black to pay a $125,000 (U.S.) fine.
He must also forfeit $6.1-million, most of which is already in the hands of prosecutors as a result of bail conditions.
"You have committed a serious offence, a very serious offence," the judge told him as he stood before her. "You have violated your duty to Hollinger International and to your shareholders."
Judge St. Eve told Lord Black, who used to control Chicago-based Hollinger, to report to jail on March 3. His lawyers requested a minimum-security facility in Coleman, Fla., near his home in Palm Beach, but it will be up to the Bureau of Prisons to decide. Judge St. Eve will rule later on whether Lord Black, 63, can remain out on bail pending his appeal of the conviction, which is expected to take a year. If the sentence is upheld, Lord Black will have to serve at least 85 per cent of his sentence before he is eligible for parole. Because he is not an American, he could also be sent to an immigration holding centre after his time is up to await deportation.
The judge said the sentence would serve as a signal to executives that "no one is above the law."
But she also expressed frustration at Lord Black. Citing the multitude of letters that poured in on his behalf, including one from Elton John discussing Lord Black's generous charitable work, Judge St. Eve wondered why he did it.
"I can't understand how somebody of your stature could engage in the conduct you engaged in and put everything at risk," the judge told Lord Black.
Lord Black's co-accused, John Boultbee, Peter Atkinson and Mark Kipnis, all former Hollinger executives, also received lighter sentences than expected.
Mr. Boultbee received 27 months in jail and a $152,000 fine. Mr. Atkinson received 24 months and a $3,000 fine. Both were convicted of three fraud charges. Mr. Kipnis received six months home detention and five years probation. He was convicted of two fraud charges.
Patrick Fitzgerald, the U.S. Attorney for the Northern District of Illinois who launched the case against Lord Black in 2005, called the sentence gratifying. The sentence "should send a message to people who would think about corporate fraud," he told reporters after the sentencing.
But he also faced some tough questions about the judge's rejection of nearly every argument the prosecution made during the hearing. The judge ruled against prosecutors on a series of motions that drastically cut Lord Black's sentence. She also ruled that the fraud amounted to far less than the government argued: $6.1-million instead of $32-million. At the start of the trial, prosecutors said the men stole $60-million from Hollinger.
"It's not a failure," Mr. Fitzgerald insisted. "The bottom line is Mr. Black will do 6½ years in jail. That's a serious amount of time. Maybe I'm just dumb, I wouldn't be relieved to go to jail for 6½ years."
Edward Greenspan, one of Lord Black's lawyers, said that while he was disappointed Lord Black will serve any jail time, it could have been far worse. "At the end of the day, to end up where we ended up is a hell of lot better than when we started," he told reporters. He noted that when the case against Lord Black started in 2004, there were allegations he and the others had committed a $600-million fraud.
Terry Sullivan, a Chicago lawyer who has followed the case, said the sentence was low.
The judge "took the very lowest end that she had to take," he said, adding that it was a fair decision. However, he said he was surprised the prosecutors pushed for such a long sentence. Was that a mistake? "Maybe."
Lord Black is expected to file an appeal in about two weeks. Andrew Frey, a New York lawyer handling the appeal, said he is confident.
"We have very good issues on appeal," Mr. Frey said. "The evidence does not establish that Conrad committed any of the crimes for which he was convicted."
Lord Black had little to say to reporters as he left the court room. He smiled as he walked by a horde of media, holding hands with his wife Barbara Amiel Black and clutching the arm of his daughter Alana.
His only comment: "On to the appeal."
During the hearing, Lord Black made a brief statement to the judge, but he offered no apologies or explanations.
"We have the verdicts we have and we can't retry the case," he said. He praised her handling of the trial and then took on accusations by prosecutors that he had shown disrespect for the court in a series of public comments. "I have never once uttered one disrespectful word about this court, jurors or prosecutors," he said.
Lord Black said he wanted to express his "profound regret and sadness" at the hardship faced by shareholders of Hollinger. The company's share price has sunk from about $18 to about $1 on the New York Stock Exchange in the past three years.
He also expressed "deep regret" for medical problems that have beset his family and the families of other defendants during the trial.
During the hearing, Jeffrey Steinback, a Chicago lawyer representing Lord Black, offered a lengthy plea for mercy.
Mr. Steinback called Lord Black a "statesman," "a loving father" and "a historian." He also read from a number of letters sent in support of Lord Black including one from Sir Elton who called Lord Black a "loyal friend" and someone who would "stick with you through thick and thin."
In another letter, Lady Black wrote about the difficulties of the trial and said she slipped her husband blood pressure medication without him knowing it, because she feared for his health and he did not like taking medicine.
Mr. Steinback also noted Lord Black's strong support for the United States, telling the judge he "finds America to be the greatest civilization the world has ever seen." And he criticized prosecutors for accusing Lord Black of not showing proper remorse for his actions.
Lead prosecutor Eric Sussman responded by telling the judge that Lord Black "nakedly stole money from the company."
He said Lord Black has done more than show a lack of remorse, his comments indicate that he is defiant and disdainful of the court and that he will do the same thing again. "Simply put, he's not sorry," Mr. Sussman said.
In Lord Black's own words - and more
'I can cope with it if it comes, and it will ... only compound the injustice of this entire vendetta. I can get on with anyone and adjust to almost anything, and I don't consider [prison] shaming.'
On his lifestyle
'It is a total fraud that I lived with any particular extravagance. I had certain ideas about how the chairman of a big newspaper should behave. So I tried to conform to that. But I was not a vulgar person.'
On his critics
'For years, I've been pummelled from all directions, and I had to conduct an orderly withdrawal to a defensible perimeter'
On the media coverage
'Stage 1 were the ululations of joy at the so-called downfall. Stage 2 is the big battle. The press like a big battle ... so they had to resuscitate me to some degree, because you can't have a big battle with a corpse. And then Stage 3 is where I win.'
/conradblack His trial, his business empire and more.
Judge Amy St. Eve sentenced Lord Black to 6½ years in prison.
Where: Lord Black will likely
report to Coleman Federal Correctional Complex in Florida byMarch 3.
Fine: Lord Black must pay a $125,000 fine and forfeit $6.1-million in money he was convicted of getting through fraud.
Afterward: Lord Black faces two years of unsupervised release after he serves at least 85 per cent of his prison sentence.
Conviction: Lord Black was convicted on one count of obstruction of justice and three counts of mail fraud July 13.
Bail: Judge St. Eve said Lord Black could remain free on his $21-million bond until reporting to prison.
From Palm Beach to Club Fed Lord Black will likely spend his days doing menial jobs for up to 20 cents an hour, wear grey sweats, eat cafeteria spaghetti and have limited phone access.