Conrad Black freed on $2m bail and 'expected to win' appeal

Published on Wednesday 21 July 2010 17:32

FORMER media baron Conrad Black was set for release from prison on a $2 million bond last night while a US judge decides whether to throw out his 2007 conviction for defrauding shareholders.

Adhering to rulings by higher courts, trial Judge Amy St Eve of the US District Court in Chicago set Black, 65, free but restricted him to the continental United States for the time being.

The Canadian-born Black, a British peer who once led the world's third-largest newspaper group that published titles including the Daily Telegraph, Canada's National Post and the Chicago Sun-Times entered a Florida prison in March 2008.

A jury convicted him of three counts of fraud and one count of obstruction of justice in a scheme that swindled now defunct media holding company Hollinger International out of $6.1 million. He was acquitted of nine other charges, including racketeering.

Black and three fellow Hollinger executives also convicted in the case arranged to pay themselves tax-free bonuses disguised as non-compete fees as they sold off pieces of the Hollinger empire to rival businesses.

Judge St Eve originally sentenced Black to six and a half years in prison, of which he has served slightly more than two years.

"My gut tells me the (courts] don't release him on bail and then expect him to go back to jail," said Hugh Totten, a Chicago attorney who has closely followed the case.

"One of the elements of being entitled to bail on appeal is that you're likely to win," he added.

On Wednesday, Judge St Eve ordered Black to appear in Chicago to be "admonished" about the terms of his release.

Black's lawyer, Miguel Estrada, said Black "does not have assets available to him" and that conservative businessman Roger Hertog would be providing his $2m bond.

Mr Hertog is vice-chair emeritus of Alliance-Bernstein LP, an investment firm that was reportedly valued in 2002 at $100 billion. The pair were two of the original backers for the now-defunct New York Sun newspaper, which was published from 2002 until 2008.

Black will now travel to Chicago on a commercial flight from Florida and appear before Judge St Eve on Friday.

Black's mansion in Palm Beach, Florida, is now owned by a finance company, and he may live in a New York hotel while the appeal process continues, Mr Estrada said.

Last month, Black won a victory when the US Supreme Court limited the reach of the federal "honest services" fraud law that prosecutors used frequently in corruption cases against government officials and executives such as Black and former Enron chief executive Jeffrey Skilling. The court stopped short of overturning convictions and sent the cases back to lower courts.

The federal law is applied to fraud cases in which a person is accused of depriving others of the intangible right to "honest services". It has been criticised as being too vague and overused.

Black's conviction for obstruction of justice was not changed by the ruling. During his trial jurors saw a video of him carrying boxes of documents out of his offices, loading them into his car and driving off with them. The documents were sought by US government investigators.

Black still faces numerous civil suits related to Hollinger, and US authorities have demanded $71m from him for unpaid taxes.

In theory, Black could eventually return to the UK and take up his place in the House of Lords as Lord Black of Crossharbour, speaking in debates and voting on legislation.

All he would have to to do is swear an oath of allegiance - as all members of the Lords are required to do at the start of the new parliament - and sign the new House of Lords code of conduct.