Good Lord! Will Conrad Black walk?

Prosecutors and defence lawyers weigh in after Supreme Court vacates fraud charges

The U.S. Supreme Court has cast serious doubt on Conrad Black’s convictions on three counts of fraud and sent the case back to a lower court, which could decide to altogether clear the former press baron of fraud charges. Black’s appeal hinged on the government’s use of what’s called the “honest services” component of the U.S. fraud law to convict him. In their appeal to the top court, Black’s lawyers argued the definition of “honest services” as it applies to fraud cases was too broad to be meaningful. On Thursday, the Supreme Court announced it agreed with them.

In its ruling, the Court wrote the “honest services” statute should apply only to “schemes to defraud that involve bribes and kickbacks,” rather than all cases in which a defendant is accused of breaching an intangible promise of loyalty to a company. Most significantly for Black, by narrowing the scope of the statue, the Court removed it as a justification for his conviction on three counts of fraud since the case against his involved neither bribes nor kickbacks.

Of course, Black isn’t out of the woods yet. As the judges noted in their ruling, jurors were presented with three options with respect to the fraud charges at Black’s initial trial: they could find Black innocent; they could find Black guilty because he collected bogus fees from Hollinger for noncompetition agreements; or they could find him guilty because he shirked his duty to provide “honest services” to the company. Thursday’s ruling only knocks out the third option given to jurors—that Black was guilty of disloyalty to Hollinger—and the Supreme Court justices are leaving it up to the Court of Appeals to decide “whether the error was ultimately harmless.” In other words, the Appeals Court could still decide there was sufficient evidence upon which to convict Black even if prosecutors had never uttered the phrase “honest services.” And even if he’s cleared of fraud, Black would still have his conviction for obstruction of justice hanging over his head, though his lawyers have argued “spillover prejudice” from the inappropriate use of the “honest services” provision corrupted that charge, too, and the Supreme Court remitted the case to the Appeals Court along with the fraud charges.

Without the “honest services” theory attached to its case, though, the prosecution faces a much more stringent burden of proof, according to Scott Hutchison, a Toronto-based lawyer who’s worked on a number of white-collar crime cases. After all, Black has long defended the contentious payments, no matter how exorbitant, as money he was entitled to. “If that’s true,” Hutchison says, “there’s no fraud. Companies are allowed to structure their transactions in ways that are mutually beneficial to everyone involved. The only way it would be a fraud is if there was an act of dishonesty perpetrated against the owners of the newspapers.”

Despite the setback, at least one of those who built the case against Black doesn’t appear worried. In an online chat with Globe and Mail readers, Eric Sussman, the former lead prosecutor in Black’s case, suggested Thursday’s ruling “will have very little impact” on Black’s convictions. “One ‘theory’ of fraud is gone, but not the other,” Sussman wrote. “As for spillover [onto the obstruction of justice conviction], the Supreme Court did not opine on this issue and the Court of Appeals seemed unmoved by the argument last time.”

Still, to long-time critics of the “honest services” statute, the ruling is a significant victory—not just for Black, but for everyone. A groundswell of opposition to the provision had built up in recent years over concerns it amounted to little more than a legal safety net allowing prosecutors to press ahead with—and ultimately win—what were otherwise weak cases. Chicago-based lawyer Marc Martin, a one-time member of Black’s legal team, estimates the statute was so overused the Supreme Court decision could affect as many as 80 or 90 per cent of mail fraud cases pressed in the city. “[Thursday's ruling] closes a loophole where prosecutors could come up with a theory about how some fiduciary duty was violated or some arcane non-criminal law was violated and use that as a basis for an ‘honest services’ prosecution,” he says. “It precludes prosecutors from prosecuting breaches of ethics as criminal offences.”

In fact, in light of Thursday’s ruling, it may no longer matter whether Conrad Black’s behaviour was unethical, and it’s entirely possible it was never supposed to be criminal in the first place. “I always said—in Black’s case and in other cases like it—that they’re pushing the envelope, that this is going beyond what the statute was ever intended for,” Martin says. “Up until today, no court ever agreed with me, but today we were vindicated.”




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Good Lord! Will Conrad Black walk?

  1. The fact remains that, having served two years, Black has served more time than he would have if he had been convicted in Canada of everything he was accused of.
    Can't wait for his next column.

    • That is a good point, however Lord Black was not convicted in Canada, and his dual citizenship was renounced in order to get his title. White collar crime, is crime. Crime should not pay!

      • Yeh Right ! What about Brian Mulroney. Private business crime is different from public servant crime.

  2. Sussman should be humble. The court has found that he and Fitzgerald abused their position as DA's in order to convict a man for their own advancement. This case has shown that they did not have the ethics necessary to hold such a position and it should put a black mark by their names and reputations.

    • The court did not find that.

  3. Conrad Black and his justice-deniers at Macleans and the National Post are kidding themselves if they think the ruling will change anything or get Black out of jail earlier.

    The case is going back to a court of appeal that ripped into Black with a vengeance for his 'conventional' frauds. The court will simply rule that the 'honest services' misdirection wouldn't have affect the verdict on the mail and wire counts. End of story, and no need to mess with the obstruction of justice conviction for which Black is doing 6.5 years anyway.

    Black can dance around the dormitory with his fellow inmates for an evening but he's just throwing away more of his ill-begotten funds on the case.

    Actually, many of us wanted Black to get a new trial so he could take the stand in his own defence and be ripped to shreds under cross-examination. His bombast would make a big, horrifying impression with a jury.

    In all, it's a good result for justice… a law that was too broad has been given focus and at the same time, the upshot is meaningless for Black's reality.

    • Well said.. BadBlack

  4. American jusyice is crossed-eyed. Why aren't they going after the SEC, DTC and all Wall street goonies who naked short hundreds of companies and cover each other's a__'s

  5. Conrad Black was railroaded. He shouldn't have bothered making millions for his investors only to have those who took over the company afterwards run it into the ground and waste millions on their vendetta against Black.

  6. As long as he is not allowed back in Canada I don't give a S…t where the sob goes. I know that whereever he does go he will steal from someone. Since he is no longer a Canadian citizen and he has a criminal record in the USA he cannot be let in. At least, those are the rules for the mortals with a DUI or some minor charge.

  7. So who cares. Affects my life. I don't think so. Lol

  8. As long we don't wind up with him who cares. God forbid we would reinstae his citzenship

  9. If you talk to corporate lawyers and corporate law scholars (at least those who don't have some personal bias against Conrad Black) about the case, you'll find that many of them found the original conviction to be problematic. A huge problem at the centre of the case (although it wasn't necessarily central to the appeal) was this: Black was accused of defrauding the company. A central tenet of corporate law is that directors are responsible for administering the business and affairs of the company. Black clearly disclosed all of these transactions to the Hollinger board of directors AND the board approved the transactions. That clearly was established at trial. So here's the rub: How can you be held to have defrauded the company when the company clearly knew what you were doing AND approved what you were doing? That was always my central problem with the prosecution's case.

    • That opens another problem of corporate governance, especially in Canada & the US: Sometimes the management & the board are a little too "cozy". Chances are the CEO of any given company is on the boards of other companies managed by the people on the board of his company. This tends to make the board more loyal to the CEO than to the shareholders.

      • Black did not do anything more than Stronach did when Stronach sold his shares well above their value to a willing board. In fact, Hollinger was gaining money for the company before Black and lost money after Black. The people taking over the company are the ones that destroyed the company and legally too.

  10. If certain people could put their personal loathing for Conrad Black aside for just a moment, they might be able to see that the other good thing about this decision is that it stands for the important principle that in order to be convicted of a criminal offence, you must actually breach a statute that's on the books. If certain people cannot see why that is important, then I really wonder about them.

  11. Having followed this case for years with curious interest, I sincerely hope that he is let free. i think that the US trial was little short of a US bully court, appealing largely to the appalling fascination of the public (one could argue in this instance including myself) with the sometimes fallible and sordid details of the lives of others, with many of the rabble reserving especially scathing judgment for the foibles of the rich and famous. I might doubt, personally, the honour of the business ethics involved; heck I might even find Conrad Black to be given to periodic excesses in many types of human behaviour and might not even like him if I knew him personally; however, that does not mean that his actions were criminal, and deserving of conviction and a sentence beyond any reasonable application of fairness and justice under the circumstances. There seemed to be so many self-serving weasels in this case, most of whom were amongst the acusers and prosecution, not amongst the defendants (except Radler who was surely the largest of weasels), that 'justice' would have been better served had they all simply declared themselves ashamed of themselves and gone home to try to be better citizens the next day. So let's stop with all this hatred of a man who seems to attract that nasty element in our imperfect human souls, and let Conrad Black go home now at least, where all the others have been almost from the beginning of the sorry tale. And thank you to to McLeans, for not quite taking the bait from the rabble. In this instance, I think you have done a fine job.

  12. He pocketed a few million of shareholders money … what about our Canadian banks … "executive bonuses " $8.3 Billion in 2009 .

    Isn't this just another form of stealing from depositors and shareholders ?

    • Read my post in an earlier reply sent a few minutes ago.

  13. Conrad Black is presently serving a sentence behind bars. He will not "walk" even if the judicial system overturns the conviction. He will have been a wrongly convicted defendant. That is nowhere near a "walk." May I suggest a less misleading headline.

    • He will not walk. Being Conrad Black, he will waddle ostentatiously.

      • Come on now, you'd waddle too if you had to carry all those boxes out the back door.

    • Indeed, since they won't be overturning the obstruction charges, which he is also serving time for.

  14. …….BLACK..He will never get his life back, and he will never get his company back, Richard Breeden's “cleanup” having destroyed it. And, that being so, he will never get real justice. But through sheer doggedness he has demolished 99 per cent of the case against him. The US$600 million he was accused by Breeden of looting… He was found guilty of stealing US$2.9 million, which is less than one per cent of what Breeden accused him of, and indeed about 1.5 per cent of the US$200 million Breeden's “investigation” had cost the post-Black regime at Hollinger by the start of the trial. Of the 19 original counts against him, Conrad was convicted of just four??. The government won on three counts of “mail fraud.”!!??? But winning 99 per cent of the case isn't enough.THIS IS A HUGE LOSS FOR THE FEDS>!MUCH BIGGER THAN BLACK! MY CYR CHANGE..and add on!!.EVES<POSNER<SUSSMANN. MYFITZGERALD.GREEDY BREEDEN.AND THE BALALANCE OF THERE MEAN SPIRITED TEAM

    • Stealing only 2.9 million still makes him 100% guilty, so your ridiculous and mathematically illiterate assertion of demolishing 99% of the case against him is absurd. He is a criminal, plain and simple. Plus, he also remains guilty of obstruction of justice, perhaps the most serious of his offences. Who knows what was in those 13 boxes.

  15. What part of criminal act do the people of this country not understand. This man has repeatedly commited white collar crimes. Do you understand the word crime. So, let us understand that we have enough criminals in this country and we certainly do not need more of them. This thing did us all a favour when he gave up his citizenship. Now we can deny him entry to Canada. Let him and his rot in Miami.

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