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Conrad Black, set to be formally freed on bail, may be sent back to prison if he can’t convince an appeals court that a U.S. Supreme Court ruling requires that his fraud and other convictions be set aside.
The former Hollinger International Inc. chairman arrived in a Chicago court on Friday to sign his release papers and hear bail rules spelled out by U.S. District Judge Amy J. St. Eve. In 2007, she sentenced Black to 6 ½ years. On July 21, after more than two years at a Florida prison, he posted a $2 million bond with the help of a Wall Street friend. He had no assets available as bond collateral, according to his lawyer.
Beyond his criminal appeal, Black has to grapple with the U.S. Internal Revenue Service, which wants almost $71 million in unpaid taxes and penalties, and the U.S. Securities and Exchange Commission, which sued claiming he and former Hollinger President David Radler stole $85 million from the company.
To stay free, Black, 65, must convince a federal appeals court in Chicago that the Supreme Court ruling, which limited prosecutors’ use of a law used to convict him, supports voiding his convictions for fraud and obstruction of justice.
“Black’s strategy of sweeping all outstanding government litigation under what is in reality a very limited victory strikes me as fanciful,” said lawyer A. Jeff Ifrah, co-author of “Federal Sentencing for Business Crimes.”
Even if Black does reverse his convictions, it probably won’t help him in his fights with the IRS and SEC, Ifrah said. Radler settled his liability in the SEC case by agreeing in 2007 to pay $29 million.
The Supreme Court ruled June 24 that the so-called honest-services fraud law invoked by prosecutors was intended for cases involving bribery or kickbacks. Black was accused of neither. He has argued that jurors were improperly instructed on the honest services law as well as money-and-property fraud, then given the option of convicting him for fraud under either theory, making it impossible to know whether the guilty verdict was valid.
The obstruction charge, which resulted in its own 6 ½-year prison term, wasn’t dealt with by the Supreme Court. Black’s five-year sentence for fraud ran concurrently with the obstruction one.
“There’s a strong possibility he goes back to jail,” said former Assistant U.S. Attorney Jeffrey Cramer, who helped prosecute Black and who is now managing director at the investigative firm of Kroll Inc. in Chicago. “At the very least, obstruction stands. The judge could send him back to serve the rest of his sentence.”
If Black succeeds in getting all his convictions overturned, prosecutors have the option of retrying him. Randall Samborn, a spokesman for Chicago U.S. Attorney Patrick Fitzgerald, whose office prosecuted Black, declined to say if that is what the government would do.
“That hasn’t happened yet,” Samborn said.
The trial court case is U.S. v. Black, 05-cr-727, U.S. District Court, Northern District of Illinois (Chicago). The appellate case is U.S. v. Black, 07-4080, U.S. Court of Appeals for the 7th Circuit (Chicago).
-With assistance from Frederic Tomesco in Montreal and Leslie Patton in Chicago.
