Disgraced Black is indicted for fraud

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Lord Black of Crossharbour, the former owner of The Daily Telegraph and once one of Britain's most colourful corporate grandees, faces the possibility of prison after criminal fraud charges were levelled against him by government prosecutors in the United States.

The Canadian-born executive, who was elevated to Britain's House of Lords in 2001, is accused of looting millions of dollars from Hollinger, the international publishing empire he built up to include the Jerusalem Post, the Chicago Sun-Times and the Telegraph group's daily and Sunday titles.

Prosecutors issued a warrant for Lord Black's arrest last night, but he has the opportunity to turn himself in. If found guilty on8 counts of fraud against him, 61-year-old Lord Black may have to spend much of the rest of his life in prison in the US.

Lord Black's lawyer Edward Greenspan denied the charges in a telephone interview, saying: "Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment. It will be shown that he has, at all times, acted within the law. He is confident that, if given a full and fair opportunity to defend himself, he will be found innocent." Mr Greenspan added that Lord Black was in Toronto last night.

The case could precipitate an astonishing fall from grace for an influential figure who used his position to promote his stridently right-wing, pro-American agenda, as well as cement his position in high society. Lord Black also used the fortune he built up by running Hollinger to fund an extravagant lifestyle for himself and his wife, Barbara Amiel. They had homes in Kensington, London, New York, Toronto and Palm Beach, Florida and mixed socially with dignitaries and politicians, including Margaret Thatcher and the former US secretary of state, Henry Kissinger.

Among the charges brought by prosecutors in Chicago was the accusation that Lord Black fraudulently diverted $52m (£30m) from the sale by Hollinger of one its holdings in Canada, CanWest Global Communications. He is also accused of abusing company perks, such as using the company's jet and apartments in New York for private functions.

Lord Black's indictment has been expected for weeks after David Radler, his right-hand man for nearly 40 years, admitted in September to seven counts of fraud at Hollinger.

Mr Radler avoided a possible 35-year sentence by agreeing to co-operate with the investigation, which was led by the government lawyer Patrick Fitzgerald. Mark Kipnis, Hollinger's former lawyer, has also been indicted and John Boultbee, the former chief financial officer, was added to the list yesterday.

The criminal indictment represents a deepening of Lord Black's troubles. He is already the subject of several lawsuits in the US and Canada. Some of the most damning accusations against him appeared in a report last September commissioned by Hollinger and written by Richard Breeden, a former chairman of America's Securities and Exchange Commission.

In the document, Mr Breeden said Lord Black and his close associates were guilty of taking $400m from Hollinger in an astonishing example of " corporate kleptocracy" and "self-righteous and aggressive looting".

The scandal at Hollinger exploded in late 2003 when details of irregular deals within Hollinger came to light. It emerged that the US-headquartered company had engaged in bizarre arrangements called "non-compete deals".

Under the terms of the deals, when the publishing group sold a newspaper it would sign a "non-compete" agreement to stop it starting up another title in the area. The fees for such agreements were paid not to Hollinger but to a private holding company called Ravelston which was controlled by Lord Black and his close associates.

In a letter from Lord Black to Mr Radler released last year, the peer describes the non-compete payments as "the splendid conveyance from which you and I profited so well".

In his report, Mr Breeden painted a picture that Lord Black regarded Hollinger as his own private fiefdom. That included putting considerable private expenses on the company account, including a $90,000 bill to refurbish a Rolls-Royce and $140 for a jogging suit for Lady Black.

Lord Black was ousted as chief executive of Hollinger International in November 2003 and stripped of his chairman's title the following January. In June 2004 Hollinger sold off its prize asset, The Daily Telegraph, to the billionaire twins Sir David and Sir Frederick Barclay for £665m.

Lord Blackhas won some legal battles so far. In October 2004 a US judge dismissed a $1.25bn racketeering case brought by Hollinger. In a 2002 e-mail , Lord Black wrote: "There has not been an occasion for many months when I got on our plane without wondering whether it was really affordable. But I'm not prepared to re-enact the French Revolutionary renunciation of the rights of nobility."