A federal prosecutor accused fallen media tycoon Conrad M. Black and three other executive of swindling the Hollinger International newspaper empire they once ran out of $60 million in a series of deals that ended with a 'bold money grab.'
When questions were asked about what he was doing, Black brushed them aside as 'an epidemic of shareholder idiocy,' Assistant U.S. Attorney Jeffrey H. Cramer said in opening statements at Black's racketeering and fraud trial. 'It was theft, it was fraud, it was crime,' Cramer said in his fiery opening statements.
Black, 62, and his three co-defendants are charged with siphoning money out of the big newspaper holding company through a series of asset transfers in which they got payments from buyers in exchange for promises not to compete in the markets where the newspapers circulated.
'We all know what street crime looks like -- a man knocks you down and takes your money,' Cramer said. 'This is what crime looks like in corporate law.'
Also charged in the case are Jack Boultbee, 63, of Vancouver, Hollinger's former chief financial officer; Peter Y. Atkinson, 59, of Toronto, the company's former general counsel; and Mark Kipnis, 60, an attorney who served as corporate secretary in the Chicago headquarters.
The four defendants deny anything they did was against the law.
Previously in court filings, prosecutors have accused the defendants of swindling Hollinger International out of $84 million, but Cramer repeatedly referred to $60 million in his opening statements. The reason for the discrepancy was not immediately clear.
Hollinger International at one time owned the Chicago Sun-Times, the Toronto-based National Post, the Daily Telegraph of London and the Jerusalem Post as well as hundreds of community papers in the United States and Canada.
All of the large papers except the Sun-Times have been sold and the name of the company has been changed to Sun-Times Media Group.
Cramer said that Black and his co-defendants hid their deals not only from the shareholders but from Hollinger International's board of directors.
'They thought that they were being told the truth because they had no need to doubt it,' Cramer said of the board members. 'But they weren't.'
'Same thing with the auditors, same thing with the shareholders. They lied to them,' he said.
When the government began to close in on Black's alleged unlawful dealings, Black himself attempted to spirit 13 boxes of bank records and other evidence out of his Toronto offices, Cramer told the jury.
But the prosecutor said the Canadian-born Black, a British lord, was forced to return the records because the Securities and Exchange Commission was hunting for them.
After a short break following Cramer's opening statements, Black's defense attorney Edward M. Genson was expected to deliver an opening statement on behalf of his client.