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Canada Risky turncoat testimony will lead to lighter prison sentence for Radler

In the end, David Radler's big gamble paid off.

He took a chance in late 2005 when he agreed to testify against his old friend, business partner and close confidant Conrad Black.

His reward will be a maximum of 29 months in prison, but most likely less.

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It's an attractive fate next to the sentence Lord Black now faces; 15 to 20 years, prosecutors said yesterday, although most observers expect less.

Had Mr. Radler not cut a deal and decided to face the seven counts of wire and mail fraud with which he was originally charged, based on yesterday's verdict his prison time could have been much worse.

But as defence lawyers pointed out repeatedly during the trial, even the time he is now required to serve could be reduced considerably in the next few months if he is transferred back to Canada.

If arguments submitted by the defence hold true, Mr. Radler's incarceration could be whittled down to as little as six months at a minimum-security institution on this side of the border.

"That's the chance Radler took. Everybody could have walked out innocent except him," said Hugh Totten, a lawyer with the firm Perkins Coie in Chicago who followed the trial closely. "Or he looks brilliant, because he cut a deal that reduces his sentence to several months in a Canadian country club, which is what the prosecution has been referring to it as."

Added Mr. Totten: "He got a good deal for himself. This is how the system works."

Mr. Radler has also agreed to pay hefty fines of $29-million to the U.S. Securities and Exchange Commission. He and his associated companies will also pay $63.4-million to settle a civil suit with Hollinger International, now known as Sun-Times Media. He'll likely cover those payments through his extensive - and murky - private business holdings, but it's not exactly clear where he is getting the funds.

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The plea deal needs court approval and it's highly implausible that won't happen now, legal experts said. Failing to follow through on such deals undermines the ability of federal lawyers to negotiate for crucial testimony. Judges rarely step in unless a witness has lied on the stand.

U.S. prosecutors have agreed not to block a request from Mr. Radler to serve his time in Canada. That has been attacked by Lord Black's lawyer, Edward Greenspan, as a sweetheart arrangement.

Mr. Radler will likely ask to be sent to William Head Institution or the Ferndale Institution in B.C. Both are minimum-security facilities not far from his Vancouver home.

The defence has decried those institutions as lax, where inmates take "golf therapy" and tend cattle. Convicted killer and former Saskatchewan MLA Colin Thatcher served the latter years of his sentence at Ferndale and was allowed to bring his horse until a public outcry led to that decision being rescinded.

Though Ferndale has a tennis court and organic farm, William Head on Vancouver Island has a three-hole golf course.

Mr. Radler maintains he's been given no indication that his time will be cut down in Canada, but Mr. Greenspan accused him during the trial of negotiating "the best deal you have ever gotten in a lifetime of deal-making."

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A date will be set in the next few weeks for Mr. Radler to turn himself in to U.S. authorities, but it is likely his lawyers will argue to push that surrender back several months, getting most of the paperwork on the transfer to Canada approved before then. The transfer must be approved by the U.S. prison system and Canadian justice officials.

That means Mr. Radler, unlike Mr. Black, may end up spending little time in a U.S. facility, if he serves any time at all.

And when Mr. Radler gets out, he will again be running newspapers.

Far from the nexus of the trial in Chicago, Mr. Radler watched yesterday's verdict from the small confines of his offices in Vancouver, where he operates Alberta Newspaper Group. That company, a publisher of community papers in Alberta, is among dozens of publications Mr. Radler remains linked to in Canada and the U.S.

"At the moment I can't say anything. I have nothing to say," he said of the verdict. Since agreeing to co-operate with U.S. prosecutors, he has not spoken publicly about the case.

Beyond a stake in Alberta Newspaper Group, he owns a piece of Horizon Publications, a network of about 30 papers in the U.S. Located in places like Punxsutawney, Pa., and Newport, Vt., those papers follow a model Mr. Radler has come to love over the years; they dominate their enclave markets and spin out steady cash by running a lean operation with few employees.

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Exactly what assets Mr. Radler will come to own when he completes his time in prison is uncertain. Lawyers for Hollinger have tried to pull apart his business workings during the past few years, which include myriad holding companies, alleging he has transferred assets in an attempt to shelter them.

A deal earlier this year saw Horizon sell some of its Rhode Island newspapers to RISN Operations Inc., a corporation listed in Delaware. Its president is Mr. Radler's daughter, Melanie Radler.

In business, Mr. Radler is known for constant number-crunching, scouring his operations for ways to cut costs. During the trial, the court was shown a 1997 memo where Mr. Radler grilled one of his managers about why the number of employees at one small publication had swelled to 63 from 60 one year.

Throughout the trial, Mr. Radler was also repeatedly cast by Lord Black's lawyers as a liar whose story should not be trusted. He emerges from yesterday's verdict as the turncoat, but one whose strategy to ultimately limit the damage to himself has paid dividends not just for him, but for the prosecution.

"It would have been a very tough case to prosecute without Radler," observed Houston lawyer Tom Kirkendall. He has represented former Enron chief financial officer Jeffrey McMahon in the case against that company's dramatic implosion.

"It was a tough case to prosecute with Radler."

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