Prosecution Drops One Charge Against Conrad Black & Rests

May 30, 2007. "At this time the prosecution rests." With these words, Assistant U.S. Attorney Eric Sussman told U.S. District Judge Amy St. Eve in Chicago, on Wednesday, May 30, 2007, that the prosecution was wrapping up its case against Lord David Moffat Black, former media tycoon and former chairman and CEO of Hollinger International Inc. and three other former HII executives, former Hollinger vice-presidents John Boultbee and Peter Atkinson, and former corporate lawyer, Mark Kipnis.

Prior to that statement, the prosecution had dropped - without explanation - one charge of money laundering against Black.

IRS Agent Shari Schindler Testifies

Earlier in the day, Shari Schindler of the Internal Revenue Service told the court that when Black was Hollinger International's chairman, the company under-reported income: by US$13.2 million in 1999 and by US$10.85 million in 2000 income - monies diverted to Hollinger Inc., a private Canadian company controlled by Black and with a name similar to the publicly held Hollinger International Inc. (Hollinger Inc. in turn controlled Hollinger International Inc. through a controlling interest in shares.).

These monies were for the main part non-compete payments made by purchasers of media companies owned by Hollinger International Inc. - monies the prosecutions says belonged to HII shareholders, and what the prosecution contends are monies stolen by Black and his co-defendants. They have also previously stated that the monies were management fees disguised as non-compete payments, a move designed to avoid paying US taxes.

The defence disputes these claims. It has said that designating and receiving part of the purchase price of the media companies as non-compete payments were accepted and common practices in similar situations.

Conrad Black's lawyer Ed Genson asked Schindler: "If the monies were not illegally diverted from Hollinger International, it shouldn't have been on the income tax return, should it?"

"That's right" replied IRS agent Shari Schindler.

John Boultbee's lawyer Gus Newman made Schindler read a portion of well-known accounting firm KPMG's sign-off of HII's tax returns. The statement said that KPMG had signed off on the company's tax returns after reading the working papers on which they were based and had certified that all of the money "appears properly accounted for."

Conrad Black Trial Pages On This Site

» 1. Background to the Conrad Black Trial

» 2. Conrad Black Trial - Issues, Arguments and Chances. Charges and Defence. Opportunities and Challenges

» 3. The Conrad Black Trial and Corporate Governance

» 4. Conrad Black's Partner David Radler Pays US$28.7M Fine & US$63.4M Settlement

» 5. Conrad Black Trial Delayed

» 6. Conrad Black Trial Opening Statements

» 7. Conrad Black's Co-Defendants Distance Themselves From Him

» 8. Conrad Black's Lawyer Questions Impartiality of First Witness

» 9. The Non-Compete Payments Part 1

» 10. The Non-Compete Payments Part 2

» 11. The Non-Compete Payments Had Board Approval

» 12. Focus Shifts to Expenses & Use of Corporate Jet

» 13. Role of Lawyers in Non-Compete Payments

» 14. Role of Lawyers Part II. Accusations Suffer Setback

» 15. David Radler Takes the Stand Against Black

» 15a. Former Gov. Thompson: No Approval for Non-Compete Payments

» 16. David Radler's Second Week on the Stand

» 17. Final Assault on David Radler's Credibility

» 18. Jonathan Rosenberg Takes the Stand

» 19. The Prosecution Rests Their Case

» 20. Obstruction of Justice Charge

» 21. Radler Recall Overruled

» 22. Judge Makes a Controversial Ruling

» 23. Closing Arguments Commence

» 24. Jury Deliberates

» 25. Facts and Figures

» 26. Jury Deadlocked

» 27. Black and Co-Defendants Convicted

» 28. Black and Co-Defendants Sentenced

» 29. Radler Sentenced