Black v. United States
Black v. United States | |
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Court membership | |
| |
Case opinions | |
Majority | Ginsburg, joined by Roberts, Stevens, Breyer, Alito, Sotomayor |
Concurrence | Scalia (in part), joined by Thomas |
Concurrence | Kennedy (in part) |
Laws applied | |
18 U.S.C. § 1346 |
Black v. United States, 561 U.S. 465 (2010), is a
.Probe against Hollinger Inc.
In May 2003, following shareholder complaints, a special committee appointed by Hollinger International directors began an investigation of internal financial management, including compensation and fees paid directly and indirectly to Black's associates at Ravelston, a holding company. In particular, New York investment firm Tweedy, Browne, which had an 18% stake in Hollinger International, demanded the company probe what it alleged to be excessive payments to Conrad Black and David Radler, and demanded "disgorgement" of the funds paid.[1]
For example, in 2000, in an arrangement that came to be known as the "Lerner Exchange," Black acquired Chicago's Lerner Newspapers and sold it to Hollinger.[2] The special committee's report contained allegations of impropriety which led to a criminal investigation and, ultimately, the unraveling of the Hollinger media empire.
Black attempted to sell the controlling interest in Hollinger to British businessmen David and Frederick Barclay. The Hollinger board of directors successfully sued to halt Black's proposed transaction, though subsequent events demonstrated that the Barclays' publicly disclosed offer of $18 per share was several times higher than the share price ultimately obtained for the sale of the Hollinger assets.[3]
In November 2003, Black resigned as chief executive of Hollinger. By January 2004 the board of directors of Hollinger obtained Black's resignation as chairman. Hollinger International filed a $200 million (USD) lawsuit against Black, David Radler and their associated companies.[4]
Background: earlier civil matters
Black was called before the U.S. Securities and Exchange Commission in December 2003 but he refused to answer questions about business dealings, citing his Fifth Amendment right against self-incrimination.[5]
In May 1998, American Trucker Magazine (ATM) was sold by Southam (see also Hollinger International Inc.) in a bundled transaction including a daily circulation Western Canada newspaper for $93,672,000.[6] The purchase and sale agreement provided for the payment by the purchaser of a $2.0 million non-competition fee to the Company. The Company failed to disclose that on February 1, 1999, approximately eight months after the sale closed, the Company transferred funds equivalent to the non-competition fee to Hollinger Inc.[7] This transaction played a part in the trial.[8]
In February 2004, Delaware judge
In August 2004, a special committee of the Board of Directors of Hollinger International Inc. made a report of investigation to the
In November 2004, the
Criminal case
One year later, eight criminal fraud charges were brought by the Chicago
The criminal fraud trial of Black and three other Hollinger International executives commenced on 14 March 2007.[16]
Verdict and sentence
After twelve days of deliberation, on 13 July 2007, the jury found Black guilty of three counts of mail and wire fraud and one count of obstruction of justice and acquitted him of nine other charges, including wire fraud and racketeering. The fraud convictions related to money taken by the executives in exchange for their agreements to not compete with various Hollinger units. Prosecutors claimed these were fraudulent agreements.[17] Co-accused, Peter Y. Atkinson, John A. Boultbee and Mark Kipnis, were each found guilty of mail and wire fraud (David Radler had already pleaded guilty to fraud).[18]
On November 5, 2007, Judge Amy St. Eve denied Black's motion for a new trial. On December 10, 2007, Black was sentenced to 78 months in jail.[19] Twelve weeks later, the Court of Appeals denied his motion to remain free on bail while appealing his convictions. Black requested to be housed in a minimum security prison camp near Miami but the Bureau of Prisons denied his request and instead ordered him to report to Coleman Federal Correctional Complex near Orlando, Florida on March 3, 2008, to begin serving his sentence. Prior to his being granted bail, Black's projected release date was in October 2013.
Reaction and consequences
Black told journalists he would continue his "long war" against the charges and said "any conviction is unsatisfactory".[20] After the verdicts, Black's Canadian lawyer Edward Greenspan said, "The heart of their case was lost." However, former federal prosecutor and SEC enforcement lawyer Jacob Frenkel called it a "stunning victory" for the government and explained how a split verdict "highlights for the appellate court that the jury was very thoughtful and thorough in its deliberations."[21]
Investigators hired by Hollinger companies to locate assets examined more than forty bank accounts which may be, or may have been, held in the name of Black, his wife, or affiliated entities. According to court filings, Ravelston Corp. also had a subsidiary in Barbados called Argent News Inc. and another in Bermuda called Sugra Bermuda Ltd.[22] A report by a special committee of the board of Hollinger International Inc. said Black co-owned two Barbados companies, Moffat Management Inc. and Black-Amiel Management Inc., which both received millions of dollars in payments, the former allegedly owned by Black and his co-defendants, and the latter by Black, his wife and Boultbee.[23] In November 2007, Sun-Times Media Group (formerly Hollinger) said in a regulatory filing that it had spent $107.7 million on legal fees and indemnification costs for criminal and civil actions involving Black, Boultbee, Kipniss and Atkinson.
After the verdict,
Black's ability to re-enter Canada is uncertain unless he obtains dispensation from the Canadian government. Were he to regain residency, "Canadian citizenship can't be granted to those who are criminally inadmissible and neither the minister nor the Governor in Council (cabinet) can override that," according to an immigration department spokesperson.[26] The loss of his Canadian citizenship also makes it impossible for Black to be transferred to a Canadian prison where he would be eligible for parole much sooner than if he were to serve time in the United States.[26]
Appeal
Black's oral arguments were heard June 5, 2008, by a three-judge panel of the United States Court of Appeals for the Seventh Circuit. Andrew Frey argued that Black and his co-defendants did not steal from Hollinger when they authorized individual non-competition payments. Frey asserted that the monies were "management fees" and that Hollinger International shareholders were not hurt by the payments. Appeals judge Richard Posner said, "The bulk of the evidence [in the Hollinger case] has to do with pretty naked fraud."[27] Posner was skeptical about defense arguments that Black did not obstruct justice by removing boxes from his Toronto office, commenting, "The timing was bizarre, the removal of the documents in the middle of an investigation."[28] Three weeks later, on June 25, 2008, the 7th Circuit Court of Appeals affirmed the convictions.[29] and rejected all of the arguments raised by the defense. The circuit court found that "the evidence established a conventional fraud, that is, a theft of money or other property from Hollinger by misrepresentations and misleading omissions..." The panel affirmed the jury's findings stating that, "It is not as if Black had merely been using his power as controlling shareholder to elect a rubber-stamp board of directors or to approve a merger favorable to him at the expense of the minority shareholders ... He was acting in his capacity as the CEO of Hollinger when he ordered (Mark) Kipnis to draft the covenants not to compete and when he duped the audit committee and submitted a false 10-K."[30] Black, for his part, maintained the form in question was simply improperly, and not falsely, submitted.[11]
Prosecutor Eric Sussman replied to news of the initial appeal decision saying, "I think at some point in time Mr. Black needs to take a hard look in the mirror and ask who it is that really doesn't understand the conduct that took place in this case…You've got 16 people who have taken a look at the facts and the law in a very detailed and time-consuming way, and they have all reached the same conclusion, which is that he stole money from this company and he tried to obstruct the investigation."[31]
Black added Harvard professor
The US Supreme Court heard an appeal of Black's fraud conviction on 8 December 2009.[39][40] Black's application for bail pending his appeal was turned down by the Supreme Court and [41] subsequently by Judge St. Eve of the US District Court.
The Supreme Court only reviewed Black's fraud convictions and did not reconsider his conviction for obstruction of justice for which he received a sentence concurrent with his sentence for fraud; thus even a successful appeal would not necessarily have resulted in a reduction of his prison sentence. Eric Sussman, Black's prosecutor in the Chicago trial, told the Toronto Star that the Supreme Court's rejection of Black's bail request means that the "Supreme Court is confident that no matter what happens he's still going to be serving six-and-a-half years for obstruction of justice" regardless of the outcome of his appeal.[41]
On June 24, 2010, the U.S. Supreme Court released its 9–0 decision ordering the 7th circuit court, which had upheld Black's conviction at trial, to review its own decision regarding the three fraud convictions against Black in light of the Supreme Court's construction of the
On October 28, 2010, the U.S. 7th Circuit Court of Appeals overturned two of the three remaining mail fraud counts. It left Black convicted of one count of mail fraud, of which his portion was $285,000 (USD),[46] and one count of obstruction of justice. The court also ruled that he must be resentenced.[47] On December 17, 2010, Black lost an appeal of his remaining convictions for fraud and obstruction of justice. The three-person panel did not provide reasons. On May 31, 2011, the Supreme Court of the United States refused to grant Black leave to appeal his two remaining convictions without any comment.[48] Resentencing on the two remaining counts by the original trial judge occurred on June 24, 2011.[49] Black's lawyers recommended that he be sentenced to the 29 months he has already served, while the prosecution argued for Black to complete his original 6+1⁄2-year sentence. The probation officer's report recommends a sentence of between 33 and 41 months.[50] On that date, Judge St. Eve resentenced him to a reduced term of 42 months and a fine of $150,000 returning him to prison to serve the remaining 13 months of his sentence.[51]
Black did not return to his former location of Coleman Federal Correctional Facility because two female guards at Coleman reported they feared for their safety if Black returned. Instead, he reported on September 6, 2011, to the Federal Correctional Institution, Miami.[52] He was released from prison on May 4, 2012. Although he has given up his Canadian citizenship in 2001 in order to receive British peerage, he has expressed desire to live in Canada after his prison term completed.[53] He was granted a one-year temporary resident permit to live in Canada in March 2012 when he was still serving his sentence. Critics denounced that Black received special treatment from the Canadian government but Stephen Harper, the Prime Minister, denied any political influence.[54] Upon his release from the prison, Black was immediately picked up by the U.S. Immigration officials and was escorted to the Miami International Airport. He arrived at Toronto on the same afternoon and returned to his home for the first time in nearly five years.[55]
On February 19, 2013, Black's motion to vacate his guilty verdict was dismissed.[56]
Time in prison
Black, Federal Bureau of Prisons #18330-424, was incarcerated at Coleman Federal Correctional Complex near Orlando, Florida for 28 months from March 3, 2008, until he was released on July 21, 2010.
On August 23, 2008, Black authored a piece in the National Post about the experience of prison. He repeated his assertion that he had been wrongly convicted and asserted: "The bunk about a lavish lifestyle was disbelieved and rejected by the jury." He believes that time will show the Canadian and American justice systems were disgraced by his conviction, not him. He adds, "But someone has to resist the putrification of justice in these jurisdictions, and if someone of my means doesn't, who will?" [57]
In 2008 Black wrote to the
After being promoted from his initial prison job as a dishwasher, he taught high school level classes in American history helping a dozen prisoners earn their high school diplomas. Black was nicknamed "Lordy" by his fellow convicts, a reference to his membership in the UK aristocratic nobility.[59]
See also
References
- ^ Olive, David "A Conrad Black Timeline" TheStar.com March 11, 2007
- ^ "Hollinger International Inc - 8-K - EX-99.2". SEC Info. August 30, 2004. Retrieved November 17, 2008.
- ^ a b "Auto Da Fé: Conrad Black, Corporate Governance, and the End of Economic Man", Books in Canada, December 2006
- ^ "Conrad Black: Where did it all go wrong?; February 27, 2004". BBC News. February 27, 2004. Retrieved June 18, 2010.
- ^ CBC News "Conrad Black: Timeline"
- ^ "HOLLINGER INTERNATIONAL INC - 10-K Annual Report - 12/31/1999". getfilings.com. Retrieved January 5, 2018.
- ^ "HOLLINGER INTERNATIONAL INC". www.sec.gov. Retrieved January 5, 2018.
- ^ "Black On Trial". tribunedigital-chicagotribune. Retrieved January 5, 2018.
- ^ Herman, Eric "Judge stymies Black" Archived 2007-12-01 at the Wayback Machine Chicago Sun-Times, February 27, 2004
- ^ [1], Hollinger International v. Black, Delaware Chancery, February 26, 2004
- ^ ISBN 978-0-7710-1670-7.
- ^ "EX-99.2". Sec.gov. Retrieved June 18, 2010.
- ^ "Lord Black is charged with fraud; November 15, 2004". BBC News. November 15, 2004. Retrieved June 18, 2010.
- ^ "Black guilty on 4 charges, including obstruction". CTV.ca. July 13, 2007. Archived from the original on July 15, 2007. Retrieved June 18, 2010.
- ^ "A Head-Scratching Verdict Against Conrad Black", The Wall Street Journal, June 28, 2011
- ^ "Waldie, Paul; The Globe and Mail: Trump may testify for Black; March 14, 2007". Toronto: Theglobeandmail.com. Archived from the original on March 16, 2007. Retrieved June 18, 2010.
- ^ Harris, Andrew "Conrad Black's Guilty Verdict..." Bloomberg.com May 2, 2008
- ^ "CBC News: Conrad Black guilty of obstruction and mail fraud; July 13, 2007". Cbc.ca. July 13, 2007. Archived from the original on April 3, 2009. Retrieved June 18, 2010.
- ^ "CBC News Conrad Black sentenced to 78 months in jail; December 10, 2007". Cbc.ca. December 10, 2007. Archived from the original on April 3, 2009. Retrieved June 18, 2010.
- ^ Canada (July 19, 2007). "Waldie, Paul; The Globe and Mail: Black gets bail – but is confined to U.S.; July 19, 2007". Toronto: Theglobeandmail.com. Retrieved June 18, 2010.
- ^ "Fall of an arrogant fraud: What really brought down the empire of Conrad Black?". The Independent. London. July 15, 2007. Archived from the original on September 23, 2009. Retrieved May 27, 2010.
- ^ "Wisniewski, Barbara; Chicago Sun Times: The hunt for Conrad's cash; July 19, 2007". Suntimes.com. July 19, 2007. Archived from the original on March 10, 2008. Retrieved June 18, 2010.
- ^ Waldie, Paul; McNish, Jacquie; Leader, Jessica (July 19, 2007). "Global hunt heightens for Black assets". The Globe and Mail. Retrieved April 28, 2023.
- ^ "Editorial; Toronto Star: Strip Black of honour; July 19, 2007". Thestar.com. July 19, 2007. Retrieved June 18, 2010.
- ^ "CTV News: Harper says he won't help Black return to Canada; July 18, 2007". Ctv.ca. July 18, 2007. Archived from the original on October 18, 2007. Retrieved June 18, 2010.
- ^ a b "Canadian Press, July 13, 2007". Halifax.metronews.ca. Archived from the original on March 10, 2008. Retrieved June 18, 2010.
- ^ Chandler, Susan: "Judges appear cool to Black appeal" Archived 2008-06-09 at the Wayback Machine, Chicago Tribune, June 6, 2008
- ^ Rick Westhead (June 6, 2008). "Court hears Black appeal". Toronto Star.
- ^ United States v. Black, 530 F.3d 596 (7th Cir. 2008).
- ^ a b c Westhead, Rick, "Black has one card left to play", Toronto Star, June 26, 2008
- ^ Bell, Douglas, "Denied: Posner's wry prose more or less sends Black to jail until 2013", Toronto Life, June 26, 2008
- ^ Harris, Andrew "Conrad Black Loses Bid for Appeals Court Rehearing" Bloomberg.com
- ^ Tedesco, Theresa, "Black's defence readies for Supreme Court appeal" Archived 2008-08-01 at the Wayback Machine, Financial Post, July 16, 2008
- ^ Wisniewski, Mary "Appeals Court upholds Conrad Black's conviction" Archived 2009-06-22 at the Wayback Machine Chicago Sun-Times, June 25, 2008
- ^ Valdmanis, Richard, "Jailed press baron Black seeks Bush pardon: report", Reuters, November 20, 2008
- ^ Michael Isikoff (January 19, 2009). "No Pardon For Libby Bush uses clemency powers sparingly to the end". Newsweek.
- ^ "Bush Commutes Sentences for Two Former Border Patrol Agents". Fox News. January 19, 2009. Archived from the original on March 19, 2014.
- ^ Bush fails to pardon Conrad Black, Toronto Star, January 20, 2009
- ^ "Conrad Black's Conviction Questioned by High Court (Update1)". Bloomberg.com. December 8, 2009. Retrieved June 18, 2010.
- ^ "Conrad Black applies for bail". Globe and Mail. Toronto. May 28, 2009. Archived from the original on September 12, 2012.
- ^ a b "U.S. Supreme Court turns down Black's bail request". Toronto Star. June 11, 2009.
- ^ a b "Conrad Black seeks bail", Globe and Mail, July 7, 2010
- ^ "Conrad Black Fraud Convictions Set Aside". Archived from the original on May 22, 2014. Retrieved June 24, 2010.
- ^ "Conrad Black sued for $71 million in back taxes", Toronto Star, July 15, 2010
- ^ "Conrad Black granted bail", Toronto Star, July 19, 2010
- ^ "Bring Conrad Black home", Ipolitics", July 1, 2011
- ^ "Archived copy" (PDF). Archived from the original (PDF) on November 5, 2010. Retrieved October 29, 2010.
{{cite web}}
: CS1 maint: archived copy as title (link) - ^ "U.S. Supreme Court rejects Conrad Black's appeal", Globe and Mail, May 31, 2011
- ^ "Conrad Black sentencing set for June 24", Chicago Sun-Times, January 13, 2011
- ^ "Will Conrad Black go back to jail?", Globe and Mail, June 23, 2011
- ^ "Black sent back to jail for 13 months" Archived 2016-03-03 at the Wayback Machine, Globe and Mail, June 24, 2011
- ^ Kwan, Amanda (September 2, 2011). "Black won't return to Florida prison". Toronto Star. Retrieved September 15, 2011.
- ^ D'Aliesio, Renata (May 4, 2012). "Conrad Black released from Florida prison". Toronto: The Globe and Mail. Retrieved May 4, 2012.
- ^ Chase, Steven (May 2, 2012). "Just how special is Lord Black's residency permit?". Toronto: The Globe and Mail. Retrieved May 4, 2012.
- ^ National Post Staff (May 4, 2012). "Conrad Black returns to Toronto after serving jail time in U.S." National Post. Retrieved May 4, 2012.
- ^ "Conrad Black loses bid to void guilty verdict". Toronto Star. February 20, 2013. Retrieved February 20, 2013.
- ^ Black, Conrad "On strip searches and fellow inmates" Archived 2008-08-28 at archive.today National Post, August 23, 2008
- ^ Chicago Sun-Times "Conrad Black says prison life 'safe and civilized'" Archived 2009-05-06 at the Wayback Machine March 24, 2008
- ^ "Fellow cons called their tutor 'Lordy'", Globe and Mail, July 22, 2010
Further reading
- Griffin, Lisa Kern (2011). "The Federal Common Law Crime of Corruption". North Carolina Law Review. 89 (5): 1815–1847. SSRN 1934389.
- Ryznar, Margaret (2010). "The Honest-Services Doctrine in White-Collar Criminal Law". Hamline Law Review. 34: 83. SSRN 1910157.
External links
- Text of Black v. United States, 561 U.S. 465 (2011) is available from: CourtListener Justia Oyez (oral argument audio)