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Conrad Black claims partial court victory

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Conrad Black has won a partial victory in his criminal case. A Chicago appeal court has upheld one fraud conviction and his conviction for obstruction of justice. The court reversed two fraud counts.

Black will have to be resentenced on the fraud and obstruction charge and prosecutors will now have to decide whether to retry him on the other charges. Most legal experts expect that is unlikely and they doubt  Black will return to prison since any new sentence would be far less than his original 6 1/2 year term.

Black and three other former executives of Hollinger International Inc. were convicted in 2007 of fraud over the misappropriation of $6.1-million US from the Chicago-based company. Black was also convicted of obstruction of justice relating to the removal of boxes from his Toronto office in 2005.

Black and the others appealed and won a victory at the U.S. Supreme Court last June. The high court rewrote a key section of the fraud statute by redefining the "honest services" theory, which had become a popular prosecutorial tool in corporate crime cases including the Hollinger. The Supreme Court left it up to a three-judge panel of the Chicago appeal court to determine whether Black's convictions could stand given the new definition.

In today's unanimous ruling, the appeal court said one fraud charge, involving a $600,000 payment, could stand because it did not relate to honest service but amounted to basic fraud. The evidence "of pecuniary fraud is so compelling that no reasonable jury could have refused to convict the defendants of it," said the ruling written by Appeal Judge Richard Posner.

The other two fraud charges were reversed because those convictions did hinge on honest services and no longer fit within the Supreme Court’s definition, the court said.

The obstruction charge also had nothing to do with honest services, the court ruled.

"No reasonable jury could have acquitted Black of obstruction," Posner wrote.

The U.S. Attorney's office in Chicago said it will review the ruling to decide whether a re-trial is necessary.

"We are pleased that the Court of Appeals affirmed the convictions on fraud and obstruction counts and we will make our further intentions known to the District Court at the appropriate time after we have studied the opinion carefully," the department said in a statement.

Posner indicated in the ruling that prosecutors could retry Black on the reserved charges, but he cautioned against it.

"The government may wish instead, in order to conserve its resources and wind up this protracted litigation, to dismiss the [two fraud counts] and proceed directly to re-sentencing."

Black was released on bail last July, after serving just over two years in a Florida prison, in the wake of the Supreme Court decision. Under the terms of his bail, he had to remain in the United States and has been living in his Palm Beach, Fla., home.

Judge Amy St. Eve, the district judge who oversaw the trial, will have to hold a hearing to re-sentence Black and the others. Black, who is a British citizen, also faces the likelihood of being deported. And, the future of his Palm Beach house is also uncertain. Black has indicated that he will sell the $30-million property if any of the convictions were not reversed.

Today's ruling clears one defendant in the case completely. Hollinger lawyer Mark Kipnis, the only American defendant, had been convicted of one fraud charge. That charge has now been reversed and it is unlikely prosecutors will re try him.

"It's wonderful news," said Kipnis's lawyer Ron Safer. "It has been a long and winding road for him."

Fraud charges for two others, Jack Boultbee and Peter Atkinson, have been upheld. Both men are out of jail - Boultbee on bail and Mr. Atkinson has finished his sentence - and living in Canada.

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