July 13 (Bloomberg) -- Conrad Black, ex-Hollinger International Inc. chief executive officer, was found guilty of defrauding the newspaper publisher, becoming the latest CEO convicted in a five-year U.S. crackdown on corporate crime.

Black, 62, was convicted today in Chicago of three fraud charges and obstruction of justice. He was acquitted on nine charges. Sentencing is to be Nov. 30. Black faces 15 to 20 years in prison, prosecutors said. His lawyer vowed to appeal.

Black and associates were accused of stealing $60 million from Hollinger, once the third-largest publisher of English- language newspapers and owner of the Chicago Sun-Times and U.K.'s Daily Telegraph. Prosecutors said he made illegal gains using agreements not to compete with buyers of Hollinger papers.

``The government overcame a very shaky start to win this case,'' said Jacob Frenkel, an ex-prosecutor in Rockville, Maryland. ``They were able to pull a rabbit out of the hat.''

A jury of nine women and three men returned the verdicts after a 15-week trial and 12 days of deliberations. Jurors resumed their work July 10 on orders of U.S. District Judge Amy St. Eve after saying they couldn't agree on all the charges.

Three codefendants were convicted of the same three fraud counts as Black: ex-Hollinger Vice President Peter Atkinson, 60, ex-Chief Financial Officer John Boultbee, 64, and ex-General Counsel Mark Kipnis, 59. Atkinson and Boultbee were accused of stealing through the noncompete agreements. Kipnis was accused of assisting them.

Noncompete Agreements

As Hollinger disposed of about $3 billion of its newspapers, sales contracts were accompanied by promises by Black and his associates not to compete with the buyers, in exchange for payments to the individuals. Prosecutors said the agreements were foisted on the buyers and the money should have gone to the company.

Black faces a possible 20 years in prison on his most serious conviction, obstruction of justice. The three fraud charges carry a maximum penalty of five years each.

Black has been free on $21 million bail. Lead prosecutor Eric Sussman asked St. Eve after the verdicts to revoke the former CEO's bond, saying the government calculates his sentence at 15 to 20 years in prison.

``He has had his day in court,'' Sussman said. ``Will he show up for sentencing?''

A lawyer for Black argued the bail should continue.

``We have a very visible man who is followed around by reporters wherever he goes,'' defense attorney Edward Genson said. ``He has no incentive to flee.''

Bail Hearing

St. Eve said she will hear more arguments July 19 on Black's bail. Meanwhile he surrendered his passport and must stay in the Chicago area. Atkinson, Boultbee and Kipnis remain free. Sussman said Atkinson and Boultbee face seven to 10 years in prison.

Black didn't visibly react to the first decision, a guilty verdict, and leafed through a jury form as the others were read.

``Conrad Black was acquitted of all the central charges,'' his lawyer Edward Greenspan said in announcing the plan to appeal. ``We vehemently disagree with the government's position on sentencing.''

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

The government didn't convince jurors he cheated Hollinger shareholders by spending company money on himself, including $500,000 for a company jet to fly to Bora Bora for a vacation, two-thirds of a $62,000 birthday party for his wife, Barbara Amiel Black, and the renovation of their Park Avenue home.

`A Convicted Felon'

''He's now a convicted felon, convicted of serious charges,'' U.S. Attorney Patrick Fitzgerald said of Black at a press conference. He called the projected sentence of 15 to 20 years a ``good-faith conservative estimate.''

Prosecutors won two of their three mail fraud convictions of each man for payments not to complete with American Publishing Co., a Hollinger unit that then owned a single newspaper, in Mammoth Lakes, California.

Black, Boultbee and Atkinson, Hollinger executives at the time, promised not to compete with the subsidiary if they left the parent company. In return, they paid themselves a total of $5.5 million, prosecutors said.

Assistant U.S. Attorney Jeffrey Cramer called the arrangement ``a money grab'' when he introduced the case to the jury in March.

Since Enron Corp. collapsed in 2001, prosecutors convicted every chief executive officer tried for accounting fraud or other major corporate crime. Black was the last targeted CEO to be tried.

Previous Cases

Those convicted include former CEOs Kenneth Lay and Jeffrey Skilling, 53, of Enron; Bernard Ebbers, 65, of WorldCom Inc.; L. Dennis Kozlowski, 60, of Tyco International Ltd.; Joseph Nacchio, 58, of Qwest Communications International Inc.; Richard Scrushy, 54, of HealthSouth Corp.; and John Rigas, 82, of Adelphia Communications Corp.

Lay's conviction was voided last year because he died at age 64 before he could complete his appeals.

Scrushy, who led the largest U.S. operator of rehabilitation hospitals, was acquitted of accounting-fraud charges, then was convicted of bribing the governor of Alabama to gain a seat on a state hospital board.

Prosecutors told jurors in closing arguments that Black and his codefendants ``systematically stole'' the millions, leaving a ``phony paper trail.'' No defendant took the witness stand.

Defense lawyers said the noncompete agreements were required conditions of selling the newspapers. Black's lawyer asked jurors not to convict him just because he's rich.

Forced Out

Black was forced to resign as Hollinger's CEO in November 2003 after an internal investigation concluded he and the other executives paid themselves $15.6 million without board approval. Two months later, the board fired Black as chairman and sued him for $200 million. The four men were indicted in 2005.

The chief government witness at the trial was former Hollinger President F. David Radler. He pleaded guilty to a single fraud count stemming from the noncompete-fee scheme.

Radler told jurors that Black oversaw the diversion of Hollinger money to its parent, the Toronto-based holding company Hollinger Inc., which Black controlled.

Hollinger at its peak trailed only News Corp. and Gannett Co. in publishing English-language papers, including the Canada's National Post, the Jerusalem Post, the Sun-Times, the Daily Telegraph and hundreds of community newspapers. The company is now Sun-Times Media Group Inc.

Impact on Sun-Times

The verdict removes ``a potential threat of Black regaining control'' of the company, Sun-Times board member Herbert Denton said. Shares of the Chicago-based company rose 13 cents, or 2.5 percent, to $5.35 in New York Stock Exchange composite trading.

Black, 6-foot-1, silver-haired and barrel-chested, was raised in Toronto and is now a member of Britain's House of Lords as Lord Black of Crossharbour. He renounced his Canadian citizenship to become a British peer. He wrote well-reviewed biographies of former U.S. presidents Richard Nixon and Franklin D. Roosevelt.

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 in Chicago at aharris16@bloomberg.net; Joe Schneider in Chicago at jschneider5@bloomberg.net.

Last Updated: July 13, 2007 18:19 EDT