Conrad Black Rejected by Supreme Court on Fraud Conviction

(Updates with comment from Black’s attorney in fifth paragraph.)

May 31 (Bloomberg) -- Conrad Black lost a bid for a second U.S. Supreme Court hearing on his corporate fraud conviction as the justices left intact a ruling that may send the former Hollinger International Inc. chairman back to prison.

A year after ruling for Black on one issue in his case, the high court today turned away his follow-up appeal, which sought to overturn the remaining two counts of his conviction for fraud and obstruction of justice.

The rebuff leaves Black facing the prospect that he will receive little if any benefit from last year’s ruling. He is scheduled to be resentenced June 24 in Chicago, and federal prosecutors are asking U.S. District Judge Amy J. St. Eve to re- impose the 6 1/2-year sentence he received after his 2007 conviction.

Black, 66, and three other former Hollinger executives were found guilty of illegally taking $6.1 million from the Chicago- based newspaper company as they engineered the sale of its assets.

“A decision by the Supreme Court not to review a case is not a ruling on the merits, and it does not remotely suggest that the decision below was correct,” Miguel Estrada, Black’s attorney, said in an e-mail. A lower court ruling that upheld part of Black’s conviction “was not merely erroneous,” Estrada said. “It was a complete travesty.”

Narrowed Scope

The Supreme Court last year used Black’s case, along with that of former Enron Corp. Chief Executive Officer Jeffrey Skilling, to narrow the scope of a federal law that criminalizes so-called honest-services fraud.

The effect of that ruling on Black’s four-count conviction wasn’t immediately clear because prosecutors had presented the jury with two theories -- one focusing on honest-services fraud and the other alleging the theft of money -- and the two sides disagreed over what role each theory played in the jury verdict.

A federal appeals court in Chicago set aside two counts, leaving intact convictions for obstruction of justice and for fraud connected to a $600,000 payment made to Black and other company officials.

Discussing the fraud conviction, the panel said the evidence of theft was “so compelling that no reasonable jury could have refused to convict” Black, former Chief Financial Officer John A. Boultbee and former Vice President Peter Atkinson.

Legal Standard

Black, Boultbee and Atkinson argued in their joint Supreme Court appeal that the appeals court used the wrong legal standard.

“There is more than a reasonable likelihood that the jury convicted petitioners for conduct that is not a crime,” their lawyers argued.

The Justice Department urged the Supreme Court not to hear the appeal.

Black was freed on bail in July after the Supreme Court ruling, having served two years and four months of his term.

Under Black’s leadership, first as chief executive officer, then as chairman, Hollinger was the world’s third-largest publisher of English language newspapers. Its holdings included the Chicago Sun-Times, Canada’s National Post, the U.K.’s Daily Telegraph and the Jerusalem Post. Hollinger is now known as Sun- Times Media Group Inc.

The Supreme Court case is Black v. United States, 10-1038.

--With assistance from Andrew Harris in Chicago and William McQuillen in Washington. Editors: Jim Rubin, Laurie Asseo.

To contact the reporter on this story: Greg Stohr in Washington at [email protected]

To contact the editor responsible for this story: Mark Silva at [email protected]