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Conrad Black and his wife Barbara Amiel leave federal court in Chicago, June 24, 2011. (JOHN GRESS/REUTERS/JOHN GRESS/REUTERS)
Conrad Black and his wife Barbara Amiel leave federal court in Chicago, June 24, 2011. (JOHN GRESS/REUTERS/JOHN GRESS/REUTERS)

CONRAD BLACK

Black sent back to jail for 13 months Add to ...

Conrad Black's battle with the U.S. justice system came to a dramatic close Friday with Lord Black quoting Mark Twain, his wife collapsing on a bench and the presiding judge saying she still can't figure him out.

"I still scratch my head as to why you engaged in this conduct," Judge Amy St. Eve told Lord Black. "Good luck to you."

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When the hearing ended, Lord Black left the courtroom with his arm around his wife, Barbara Amiel Black, and facing up to another year in jail for fraud and obstruction of justice.

Lord Black waived off reporters' questions as he slowly guided a frail-looking Lady Black to a waiting car. One of his lawyers, Marc Martin, paused briefly to tell a colleague: "It's not a bad result."

A few minutes later, prosecutor Julie Porter claimed victory, telling reporters she was satisfied with the judge's decision. "This is a very strong message, to return Mr. Black to prison and make clear that he fulfill the punishment that [the judge]imposed for stealing from the company," she said.

The day began with Lord Black and his lawyers hoping for a much different result. For weeks they had been arguing in court filings that it would be unjust to send Lord Black back to prison, especially since various appeals had tossed out two of his three fraud convictions. That left one conviction for fraud and one for obstruction of justice. Even the amount at issue in the fraud had been slashed on appeal to $600,000 from $6.1-million, they pointed out.

Then it was up to Judge St. Eve to resentence Lord Black on the remaining two charges. In 2007, she'd given him a 6½-year sentence and he had served 29 months in a Florida prison before winning release on bail last year to pursue appeals.

As Friday's hearing began, Lord Black's lawyers pushed hard for Judge St. Eve to give Lord Black time served.

They pointed to stacks of letters from friends and inmates, who wrote about how much Lord Black helped them. They talked about Lord Black's charitable works, his religious faith and his constant writing that included a book and 230 newspaper articles. They spent nearly an hour talking about his work in prison, tutoring inmates, giving lectures and offering moral support. They mentioned that he gave up his $18-a-month prison salary to buy new books for the jail, offered advice to inmates on job hunting and won a standing ovation after giving a speech on African American History Day.

"He changed the lives of numerous men he encountered," one of Lord Black's lawyers, Carolyn Gurland, told the court.

Lord Black had suffered enough, she added. He'd lost his newspaper company, Hollinger International Inc., and now had high blood pressure, an irregular heart beat and early signs of skin cancer. Lady Black, 70, also has heart problems and other health concerns, Ms. Gurland added.

Then it was Lord Black's turn. He stood facing Judge St. Eve, leaned on a desk and launched into a presentation. It was the first time Lord Black had spoken at length in court and he took the opportunity to first lash out at critics, especially Richard Breeden, a former head of the U.S. Securities and Exchange Commission who investigated allegations of wrongdoing at Hollinger in 2004. Lord Black said Mr. Breeden's report had been largely discredited and he had sued him for libel, a case close to being settled. Prosecutors had "overreached" by relying too heavily on Mr. Breeden's work, he said.

Quoting Mark Twain, he told the court: "A lie gets half way around the world before the truth has its trousers on … we are finally getting to the truth."

Lord Black said he had some regrets, such as over-trusting his former business partner, David Radler, who ended up testifying against him. He also offered little remorse, telling the judge that a "reasonable person" would conclude he was guilty but that a reasonable person would not find it just for him to return to prison.

At one point, Lord Black praised his "army" of supporters, saying they came from across the United States, Canada and Britain. He also spoke about the hardships endured by his family. "It has been very difficult," he said.

Then he talked about his faith and outlook on life. "I believe that life is a privilege and that almost all challenges are in part an opportunity," he said. "I have learned to take success like a gentleman and disappointment like a man."

He ended by quoting Rudyard Kipling's poem If by memory.

Ms. Porter, the prosecutor, told the judge that nothing Lord Black's lawyers argued changed the fact that he had committed fraud and obstruction of justice. She dismissed the letters from inmates, questioning their motives for writing and suggesting that while Lord Black had done laudable work in prison, it was not extraordinary enough to warrant time served. "Time served would not be a just result," she said.

As Judge St. Eve began to read her decision, it appeared Lord Black had succeeded. The judge praised his work in prison and quoted at length from the inmate letters, dismissing the prosecution's objections to them. "This tells me about you," she said. The judge noted that Lord Black had lost his business, paid back $30-million to the company and suffered punishment "in other ways."

But then she switched tack, saying that she wanted to send a message to corporate chief executives that "the company belongs to shareholders" and that stealing from shareholders, like Lord Black did, had to be punished. She handed down a 42-month sentence, meaning an extra 13 months on top of the 29 months Lord Black has served.

As soon as Judge St. Eve said "42 months," Lady Black collapsed on her front-row bench. She lay there for several minutes while a small group of people tried to calm her. Finally she was escorted from the courtroom with the help of two men, nearly stumbling on the way out. She reportedly turned down the offer of an ambulance and managed to walk out with Lord Black later.

It's not clear what happens next. Lord Black's lawyers could appeal the sentence and they have to figure out whether he will return to the Florida prison or go somewhere else. Lord Black has sold his home in Palm Beach, Fla., and now lives in a hotel in New York. Judge St. Eve is expected to give Lord Black roughly two months to report to prison. Once released, Lord Black could be deported immediately. He gave up his Canadian citizenship but his lawyers are expected to apply for entry into Canada.

Reached late Friday, Mr. Breeden, who now runs a hedge fund based in Connecticut, had no sympathy for Lord Black.

"Perhaps if Mr. Black acknowledged that the cause of his legal travails was his own disregard of the law, the District Court might not have found it necessary to incarcerate him once again," Mr. Breeden said. "He has no one to blame but himself for his criminal behaviour."

With a report from Jacquie McNish

...................................................................................................................................................... In their own words

"I never ask for mercy and I seek no one's sympathy."

Conrad Black

"I do believe in the confession and repentance of misconduct and punishment of crime."

Conrad Black

"It's a very serious crime."

Judge Amy St. Eve

"He will do the things that are required of him and he will never, ever admit he did anything wrong, because he didn't."

Edward Greenspan, Lord Black's Toronto lawyer

"He did [his time]with grace and purpose."

Miguel Estrada, Lord Black's lawyer

"The court sent a very strong message to corporate executives. It will not be tolerated when executives steal from the company that they have a fiduciary duty to protect and when they steal from shareholders."

Julie Porter, prosecutor

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