Conrad Black faces the prospect of heading back to jail after a U.S. appeal court upheld two of four criminal charges against him.
The court’s decision is a setback for Lord Black, who had been enjoying a string of legal victories in recent months in his quest to have all the convictions reversed. Last June, he won a critical ruling at U.S. Supreme Court that changed the fraud statute in a way that bolstered his case. A month later, he was released on bail while a panel of three appeal court judges in Chicago reconsidered his case in light of the Supreme Court ruling.
The judges of the Seventh Circuit released their unanimous decision Friday, and, while they reversed two fraud convictions, leaving one fraud charge and an obstruction of justice conviction, they indicated Lord Black should still face a stiff sentence. He received a 6 1/2 year jail term in 2007 and served just over two years before being released on bail. He will now be re-sentenced by District Court Judge Amy St. Eve, who presided over the trial. In their ruling, the appeal judges suggested the district judge could take into account evidence relating to all the convictions.
“The judge could consider at the re-sentencing hearing the evidence that had been presented at the original trial concerning [the two reversed charges] in determining what sentences to impose,” said the ruling written by Judge Richard Posner. Judge Posner made it clear the panel had grudgingly reversed the fraud charges, and he noted the arguments raised had “barely” met the test for a retrial. He also mocked some of the arguments raised by Lord Black’s lawyer, Miguel Estrada.
“This is a significant loss for Conrad Black. …with the conviction of fraud charges being upheld there is a possibility that he will go back to jail,” said Jacob Frenkel, Washington-based white-collar crime specialist and former criminal prosecutor. Like many legal experts, Mr. Frenkel had expected that all fraud charges would be dropped. “This decision shows how resolute the Seventh Circuit’s belief was that he committed fraud. They worked hard to make sure that a fraud conviction was held up,” he said, adding that Judge St. Eve could impose the same 6 1/2 year sentence.
In a statement, Lord Black said he is reviewing a possible appeal. “Given the attitude of the appeal court panel asked by the U.S. Supreme Court to review its own errors, today’s decision was all that could have been expected and is a gratifying elimination of the main remaining charges,” he said. “All of the defendants are innocent of all allegations, civil and criminal, and are reviewing the next steps in this very long and exacting process of achieving complete vindication.”
The U.S. Attorney’s Office could retry Lord Black on the two reversed charges. However, most experts say that is unlikely and the appeal court judges recommended prosecutors focus on the re-sentencing hearing. Prosecutors could also move to revoke Lord Black’s bail while the case proceeds. The department would only say it was pleased with the ruling and that prosecutors “will make our further intentions known to the District Court at the appropriate time after we have studied the opinion carefully.”
Hugh Totten, a Chicago lawyer who has followed the case, doubted Judge St. Eve would revoke Lord Black’s bail or send him back to jail. “My guess is that he’s going to be re-sentenced to time served with some lengthy probation,” he said.
He also said the ruling is no victory for prosecutors. When they first charged Lord Black and three other former executives of Hollinger International Inc., prosecutors alleged the former executives had stolen more than $60-million from the Chicago-based newspaper company and they laid 17 charges. After the trial in 2007, the men were convicted of three fraud charges involving $6.1-million (U.S.). Now the appeal court has cut that to one fraud charge involving $600,000. (Only Lord Black was convicted of obstruction of justice.)
Friday’s ruling was good news for one defendant, former Hollinger lawyer Mark Kipnis, who lives in Chicago. Judge St. Eve had already dismissed one fraud charge against him, and if the appeal court ruling stands, he will be cleared of everything. His lawyer, Ron Safer, said it’s a hollow victory since Mr. Kipnis has been wiped out financially.
