June 20 (Bloomberg) -- Former Hollinger International Inc. Chairman Conrad Black deserved a free New York apartment and a partially paid birthday party for his wife because he was the ``face'' of the company, his lawyer told jurors in closing arguments at Black's fraud trial.

Prosecutors accused Black of stealing from Hollinger by buying a New York apartment from it in 2000 for $3 million when it was worth as much as $8.5 million. The same year, the company paid two-thirds of the $60,000 cost of his wife's birthday party.

``Hollinger used Conrad as their face,'' Black's lawyer Edward Genson told jurors today in federal court in Chicago. ``Hollinger used Conrad as their brand name.''

Black and two other Hollinger executives are accused of stealing more than $60 million from the publishing company as they engineered sales of more than $3 billion in newspapers and other assets between 1998 and 2001. They illegally disguised bonuses as fees paid not to compete with buyers of the publications, prosecutors said. Black is also accused of abusing company perquisites.

``The government in this case has overreached,'' Genson told jurors, asking for an acquittal. ``The government in this case has produced a case that cannot be the basis of a guilty verdict.''

Codefendants

On trial with Black, 62, are former Hollinger Vice President Peter Atkinson, 60, and ex-Chief Financial Officer John Boultbee, 63. Mark Kipnis, 59, a former general counsel, is accused of helping the others steal the $60 million. The men face more than 20 years in prison each. The jury may begin deliberating as early as June 26.

Black's lawyers attempted to refute the fee allegations yesterday, reminding jurors of evidence that showed the noncompete payments were approved by the company's audit committee and board.

Today, Genson focused his closing argument on allegations that Black committed fraud in buying the New York apartment from the company for less than fair market value. He reminded jurors that Hollinger had agreed to pay for furnishings and upgrades to the apartment. Instead, he said, Black himself paid for the furnishings, which included a $12,000 mahogany shaving stand.

``It was a lavish decoration,'' Genson said. ``He likes nice things.''

Hollinger breached its agreement with Black by not paying for the furnishings and ``as a result, it's all screwed up,'' Genson said.

Fair Deal

Black ended up paying $4.5 million for improvements over the six years and was reimbursed for only $2,181 by the company, Genson said. In purchasing the apartment at cost, Black thought it was a fair deal to him and the company, Genson said.

``There was no intent to deceive,'' the lawyer said.

Genson also praised Black for creating a publishing empire that grew from the purchase of one Quebec newspaper in the late 1960s to the third-biggest publisher of English-language newspapers in the world by the mid-1990s.

``Conrad isn't an American, but he lived a dream of hard work,'' Genson said. ``Conrad Black is a good man. Conrad Black did a lot of good things for Hollinger.''

Following Genson to the lectern, Boultbee attorney Gustave Newman told jurors his client didn't violate the law when he received noncompete fees.

CanWest

Boultbee rightly received a C$2 million ($1.9 million) noncompete payment when Hollinger sold C$3.2 billion in newspapers to CanWest Global Communications Corp. in November 2000, a deal that made the Winnipeg-based CanWest Canada's largest media company.

Prosecutors told jurors payments to Boultbee and Atkinson were illegal because CanWest hadn't requested that they sign noncompete agreements. Newman disputed that.

Newman showed jurors a portion of video testimony from Beth DeMerchant, a former outside lawyer for Hollinger, who said early deal documents indicated that individuals in addition to Black and former Hollinger President F. David Radler were to be added to the CanWest noncompete agreements.

``I thought, as I surveyed who could be the other names, I thought Jack and Peter were highly likely,'' she said, referring to Boultbee and Atkinson.

Radler, 65, pleaded guilty and testified against Black.

Newman told jurors that Hollinger shareholders weren't harmed by Boultbee's payment because it was taken from a total C$80 million carved out from the CanWest purchase price for noncompete payments.

``The $80 million was already set aside in the agreement with International,'' Newman said. ``International wasn't out a nickel because Jack Boultbee got money.''

Hollinger's board and audit committee were told four times that Boultbee received the payment and never raised an objection, Newman said.

The case is U.S. v. Black, 05cr727, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporters on this story: Andrew Harris at the federal courthouse in Chicago: aharris16@bloomberg.net and; Bob Van Voris at the federal courthouse in Chicago: rvanvoris@bloomberg.net.

Last Updated: June 20, 2007 16:53 EDT