Conrad Black Granted Bail by Court While Appealing U.S. Fraud Conviction

Former Hollinger International Inc. Chairman Conrad Black, in jail since March 2008, is another step closer to being released from prison after an appeals court granted him bail in light of a U.S. Supreme Court ruling.

The U.S. Court of Appeals in Chicago yesterday sent the case back to U.S. District Judge Amy St. Eve, who presided over Black’s trial, delegating to her the responsibility of setting conditions for Black’s release.

Black is “granted bail pending the disposition of his appeal in this court,” the appeals court wrote in the order. The case is sent back “for the limited purpose of permitting the district court to determine the conditions of release.”

Black’s request for bail followed a U.S. Supreme Court decision in June that narrowed the scope of a federal statute used at his trial, returning the Hollinger executive’s case to the appeals court. Black and three associates had been found guilty in the theft of $6.1 million from Hollinger International -- once the world’s third-largest publisher of English-language newspapers -- as they engineered its sale of assets.

Black’s conviction prompted a bill from the U.S. Internal Revenue Service, which claims the former Hollinger International Inc. chief executive officer owes almost $71 million in unpaid taxes and penalties, according to court records.

Photographer: Tim Boyle/Bloomberg

Conrad Black, former chief executive officer of Hollinger International. Close

Conrad Black, former chief executive officer of Hollinger International.

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Photographer: Tim Boyle/Bloomberg

Conrad Black, former chief executive officer of Hollinger International.

Roosevelt Papers

The IRS said Black failed to report and pay taxes on income stemming from personal use of Hollinger’s corporate jets, the use of corporate money to acquire papers written by former President Franklin D. Roosevelt and Roosevelt’s private secretary, and Hollinger’s 2000 purchase of a $5.9 million New York apartment for his use.

Black, in a petition, has asked the U.S. Tax Court to throw out the assessment, which seeks payment for the years 1998 to 2003. He said in his petition the IRS relied on “sloppy and careless” findings, from an investigation that led to his conviction, when authorities put together estimates of income and unpaid taxes.

Black, 65, says he wasn’t required to file tax returns because he wasn’t a U.S. resident, court records show.

Black and the other executives with whom he was tried, were accused of siphoning the money from Hollinger International as they engineered the sale of $3 billion of its assets between 1998 and 2001. The Chicago-based company is now known as the Sun-Times Media Group Inc.

The fraud case was prosecuted by the office of Chicago U.S. Attorney Patrick Fitzgerald. His spokesman, Randall Samborn, yesterday declined to comment on the appeals court ruling.

“We’re working very hard to get in front of the district court as soon as we can so we can get him out,” said Miguel Estrada, Black’s appellate lawyer. “It shows the government was wrong to say the Supreme Court’s 9-0 ruling meant nothing.”

Black has been serving a 6 1/2-year sentence at a low- security federal prison in Coleman, Florida.

The case is U.S. v. Black, 07-4080, 7th U.S. Circuit Court of Appeals (Chicago). The tax case is Conrad M. Black v. Commissioner of Internal Revenue, 8928-10, U.S. Tax Court (Washington).

To contact the reporters on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net; Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

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