Dec. 10 (Bloomberg) -- Conrad Black, the former Hollinger International Inc. chairman convicted of mail fraud and obstructing justice, was sentenced to 6 1/2 years in prison, about a quarter of the maximum originally sought by prosecutors.

Black, 63, led Hollinger for eight years as chairman and chief executive officer. He quit as CEO in 2003 after an internal probe found he and other executives got more than $32 million in unauthorized payments. He was fired as chairman two months later and convicted in July of directing a $6.1 million fraud.

``You violated your duty to Hollinger International shareholders,'' U.S. District Judge Amy St. Eve, who presided at the trial, told Black today in Chicago federal court. ``I frankly cannot understand how someone of your stature, at the top of the media empire, could engage in the conduct you engaged in.''

Black was ordered to return the $6.1 million and pay a $125,000 fine. His conviction stemmed from a federal crackdown on corporate crime that followed the 2001 collapse of Enron Corp. Juries convicted several ousted CEOs of fraud, including Enron's Jeffrey Skilling, WorldCom Inc.'s Bernard Ebbers, Tyco International Inc.'s L. Dennis Kozlowski and Adelphia Communications Corp.'s John Rigas.

`Very Profound Regret'

``I do wish to express very profound regret and sadness'' for Hollinger investors, Black told St. Eve today. The judge sentenced him to the minimum prison term under the law, using the same guidelines that will govern the sentence of F. David Radler, the chief U.S. witness against Black and his former partner.

The judge allowed Black to remain free on bail until March 3, when he is to report to prison. St. Eve originally granted a request that she recommend he serve his term at a low security facility at Eglin Air Force Base in Florida and rejected a U.S. bid to seize his Palm Beach, Florida, home or the sale proceeds of his New York apartment.

When the judge learned Eglin had closed last year, she substituted a low security prison near Coleman, Florida.

``To end up where we ended up is a lot better than where we started,'' Black's lawyer Edward Greenspan said after the hearing. ``What is left is going to be appealed.''

Black declined to comment as he exited the courtroom. Chicago U.S. Attorney Patrick Fitzgerald said the prison term is ``a serious amount of time.''

Against Leniency

Before sentencing, Assistant U.S. Attorney Eric Sussman today argued against leniency.

``Black and his codefendants nakedly stole money,'' he argued. ``What brought him here today is his own greed.''

Convicted with Black were former Hollinger Vice President Peter Atkinson, ex-Chief Financial Officer John Boultbee, and former General Counsel Mark Kipnis. Atkinson was sentenced to two years in prison and three years probation. Boultbee was sentenced to 2 1/4 years in prison, three years probation and $152,500 restitution.

Kipnis was sentenced to six months of house arrest and five years of probation. He also was ordered to perform 275 hours of community service.

The judge rejected U.S. efforts to sentence Black under tougher guidelines or to consider the higher fraud amount found by the internal Hollinger investigation. As part of his plea bargain, Radler is to be sentenced Dec. 17 under more lenient 2000 federal guidelines. St. Eve said fairness requires Black be sentenced under the same rules.

Radler's Role

``Radler was the one who was ordering the money and telling others where it should be disbursed,'' St. Eve said, adding Radler was ``calling just as many shots.''

St. Eve said the range for Black's sentence was between 6.5 and 8.1 years. Prosecutors, who originally sought a maximum 24-year term, today asked for the maximum in the range provided by the judge, while the defense sought the minimum.

Black has 10 days to file a notice of intent to appeal, according to his appellate attorney, Andrew Frey.

``The evidence does not establish that Conrad committed any of the crimes for which he was convicted,'' Frey said. ``They've forgotten that there's a mental element to all of these crimes-- there has to be an intent.''

Frey said prosecutors failed to show the former Hollinger chairman understood he wasn't entitled to the payments.

Former federal prosecutor Robert Kent, who worked on the original charges against Black, disagreed with Frey's assessment.

Chances `Slim'

``His chances on appeal are very slim,'' he said. ``The standard for overturning a verdict based on insufficiency of the evidence requires the court to consider the evidence in the light most positive to the government.''

``The court of appeals will be constrained to accept Mr. Radler's testimony as true unless it's physically impossible,'' Kent added.

Black still faces civil lawsuits by the U.S. Securities and Exchange Commission and Hollinger International that were delayed during the criminal case.

Black, 6-foot-1, silver-haired and barrel-chested, is a member of Britain's House of Lords, with the title of Lord Black of Crossharbour. A Toronto native, he renounced his Canadian citizenship to become a British peer. He has written well- reviewed biographies of former U.S. presidents Richard Nixon and Franklin D. Roosevelt.

At its peak and under Black's command, Hollinger, now Sun- Times Media Group Inc., was the world's third-largest publisher of English-language newspapers, including the Chicago Sun-Times, London's Daily Telegraph, Canada's National Post and the Jerusalem Post.

Former Subordinates

Black was charged in November 2005. On July 13, a jury found him and three former subordinates guilty of fraud stemming from $6.1 million in checks paid to three defendants in exchange for sham non-competition agreements involving Hollinger. Black was convicted of obstruction of justice for removing 13 boxes of documents sought by regulators from his Toronto office in 2005.

Black was found not guilty of racketeering, tax charges and five wire and mail fraud counts.

St. Eve said today before sentencing that she would increase Black's prison term because he used such ``sophisticated means'' in perpetrating the fraud.

Defense lawyer Jeffrey Steinback told St. Eve the prison term constitutes ``life without parole'' for the 63-year-old Black. ``This case is not like Enron or WorldCom,'' the attorney said. ``No bank robbers ever built the banks that they robbed.''

Black was the largest shareholder in Hollinger, he added.

``His fate was wrapped up in'' the company, Steinback said.

$32 Million

The government argued the defendants were responsible for the theft of at least $32 million from Hollinger. St. Eve rejected that calculation today before sentencing.

Gene Fox, chief executive officer of Cardinal Capital Management Inc., a former Hollinger shareholder, told the judge in a victim-impact statement today that noncompete payments weren't properly disclosed, and shareholders need accurate financial information.

``Stocks would become no better than lottery tickets,'' without accurate information, Fox said. ``They lied to us repeatedly.''

Sun-Times spokeswoman Tammy Chase said in reaction to the sentence that the Chicago-based company is ``focused on the future.''

``While we continue to grapple with some of the troubling legacy issues previous management left behind, we are deeply committed to overcoming those hardships,'' she said.

Sun-Times rose 5 cents to $1.15 in New York Stock Exchange composite trading.

The case is U.S. v. Black, 05-cr-00727, U.S. District Court for the Northern District of Illinois (Chicago).

To contact the reporters on this story: Andrew Harris at the federal court in Chicago at aharris16@bloomberg.net; Joe Schneider at the federal court in Chicago at jschneider5@bloomberg.net.

Last Updated: December 10, 2007 20:40 EST