The case against Conrad Black: 'A bank robber in a suit and tie'

Lord Black of Crossharbour ­ the former proprietor of The Daily Telegraph, business titan and peer of the realm ­ plundered his media empire of $60m (£31m) in a theft no more complex than a bank robbery or a burglary, according to a blistering opening argument by prosecutors.

As the curtain went up on the Trial of Conrad Black, his accusers sought to bring dozens of financial deals and dodgy expenses down to a single point: Hollinger International was not Lord Black's personal piggy bank, Hollinger's money was not his money.

"You are sitting in a room," the prosecutor, Jeffrey Cramer, told the jury, "with four men who stole $60m [£31m], four men who betrayed the trust of thousands of public shareholders, four men who decided among themselves that their six and seven-figure salaries were not enough.

"Bank robbers wear masks and use guns, a burglar wears dark clothing and uses a crowbar. These four men used lawyers and accountants, dressed in ties and wore suits."

Lord Black is on trial with three of his closest former lieutenants, accused of 14 counts of mail, wire and tax fraud, racketeering, money laundering and obstruction of justice. Lord Black owned barely a third of his US-quoted holding company Hollinger International, but allegedly he dipped into its coffers to pay for lavish personal holidays and diverted millions of dollars in bogus "non-competition" payments that should rightly have gone to Hollinger's shareholders, the court heard. "These are the most sophisticated businessmen you will ever lay eyes on," Mr Cramer said. "They knew this wasn't their money."

But the defence said that Lord Black was the victim, not the perpetrator, of a massive theft. He was unfairly, outrageously, robbed of a media empire that was once the third largest in the English-speaking world, and he will fight tooth and nail to clear his name. "He knows exactly what he did," said Edward Genson, the rotund, folksy attorney who has defended mobsters and unloved politicians in a long career that has made him a Chicago legend. "What he does not accept ­ what he cannot accept, because it is not true ­ is that he is a criminal. I will tell you on his behalf that he is outraged, and the evidence presented over the next few months will justify that outrage."

Mr Cramer, who has cut his teeth fighting corruption in Chicago, often scowled and shouted directly at Lord Black as he set out some of the most damaging allegations against him, setting up what could be a vitriolic courtroom battle between the two men. The peer sat, with his arms crossed, impassive for more than an hour as Mr Cramer laid out a string of complex and not-so-complex ways that he had allegedly enriched himself at the expense of minority shareholders in Hollinger. In particular, Mr Cramer revealed details of a $500,000 holiday to the exclusive South Pacific getaway of Bora Bora. On return, Lord Black told US immigration officials the trip had been a personal vacation, but he billed half to Hollinger.

Prosecutors will also be scrutinising what they say was a favourable deal given to Lord Black when Hollinger International sold him the company's apartment on Manhattan's super-exclusive Park Avenue. While another apartment in the building had almost doubled in value over the previous two years, Hollinger sold Black the property for the same $3m price tag it had paid two years before. "Shareholders' pockets just got picked for a couple of million dollars," Mr Cramer said. The defence said Black had previously invested his own money in refurbishing the property. The central prosecution case rests on the details of a string of "non-competition" clauses written into Hollinger's deals to sell several newspaper chains between 1998 and 2000, where Lord Black and his companies were paid not to start rival newspapers. None of the buyers demanded such clauses, the prosecution says, but Lord Black told Hollinger's directors that they were vital to secure the sale.

John Boultbee, Hollinger's former chief financial officer, and Peter Atkinson, a former executive vice-president, were beneficiaries of the non-competition deals. The fourth defendant, Mark Kipnis, Hollinger's former general counsel, did not receive the cash but was the "inside man" who signed papers that allowed the others to mislead the board and defraud shareholders, the court heard. All the men deny fraud. Faced with the need to simplify complicated financial deals for a jury of 12 women and four men (including six alternate jurors), prosecutors repeatedly flashed up a follow-the-money diagram on a screen across from the jury. It set out the flow of cash and ended with pictures of the four defendants smiling down at a big pile of $100 bills.

And, as in common-or-garden robbery cases, there was some dramatic CCTV footage to bring home the prosecution's argument on at least one count. Lord Black is accused of obstructing justice by taking 13 boxes of documents out of his office in Toronto in 2005, just hours after US regulators had ordered him to hand them over to them. The jury was shown stills of Lord Black and his chauffeur loading the boxes into the back of his car.

Watching as Mr Cramer made his opening pitch to the jury was Patrick Fitzgerald, the out-of-towner who came to Chicago as US attorney with a brief to stamp out corruption in the city. His office has driven the pursuit of Lord Black, and he has continued to keep an eye on the case, even as Mr Fitzgerald has spent the past two years in Washington securing the scalp of Lewis Libby, the former aide to Vice-President Dick Cheney, whom he successfully prosecuted for perjury earlier this month.

Prosecutors hope to use Lord Black's arrogance to damn him, to show how he treated outside shareholders with disdain, particularly as they began to grow restive and demand an investigation into his financial affairs. In one internal email at that time Lord Black said he was "not prepared to re-enact the French revolutionary renunciation of the rights of the nobility... We are proprietors after all, beleaguered as we may be," he wrote. Other emails are entitled "Epidemic of Shareholder Idiocy".

Lord Black's defence team appear to have decided to try to laugh away the pomposity which many have suspected will land the peer in trouble with the jury. He "sounds snotty" and "has an arrogant attitude" when he fires off emails in the middle of the night, Mr Genson said, but "other than a bad attitude, you're not going to find a single thing that's wrong ". Mr Genson said that Lord Black's image was the public image of Hollinger, and his private and business expenditures were inseparable. The use of the corporate jet, he said, was mandated by the board, which believed that Lord Black's pro-Israeli views made him a terror target if he travelled on commercial flights.

He went on to characterise Lord Black as one of the most extraordinary business entrepreneurs of his generation. Hollinger International was built from nothing in a career that Lord Black began aged 23. The newspaper company disposals between 1998 and 2000, which are at the centre of the case, were in fact visionary deals aimed at protecting Hollinger as the internet ate into newspaper readership and profits. He is also "a husband and father of three, who lives in Toronto where he was born and raised", Mr Genson said, giving a nod to the presence of Lady Black and Alana Black, the peer's daughter from his first marriage, who have occupied the same two seats in the front row of the spectators' benches since jury selection began last week.

As to her outburst against the press on Monday, when she described journalists as "vermin" and called one television producer a " slut", Lady Black was unapologetic yesterday. "I'm not going to confirm or deny those words," she said, claiming they had been said in a private conversation with her step-daughter. "They were about specific journalists and they know who they are," she said, adding she was "here for more important things".

Prosecutors did not mention the columnist in their opening arguments, although her lavish spending habits are likely to creep into evidence over the next few months. Problems with a juror had delayed the start of opening arguments from Monday, but they began on time yesterday morning. The airless, mahogany-panelled room was stuffed with dozens of journalists from some of the more than 300 media outlets which have registered to cover the trial.

Judge Amy St Eve has refused so far to disclose the names of the jurors ­ as would be normal in the US ­ fearing that media pressure may distract them. Leaning on a cane because of a neurological condition, Edward Genson said that ­ unlike in some of America's biggest recent corporate fraud trials, such as that of Jeffrey Skilling and Kenneth Lay from Enron ­ Hollinger International was not a company in trouble and no one had cooked the books at the company. "It was a healthy and successful company producing some of the best newspapers in the world, until it was taken away from Conrad Black." And he added: "This is not a story about a theft by Conrad Black. This is a story about a theft from Conrad Black." US prosecutors are the tools of the minority shareholders whose campaigns against his spending were just a way of wresting control from Lord Black, Mr Genson claimed. And he turned his fire on David Radler, Lord Black's right-hand man for more than three decades, who both sides claimed will be the central figure in the case.

In 2005, Mr Radler negotiated a plea deal, accepting one charge of fraud and a lenient 29-month prison sentence in return for testifying against Lord Black. To the prosecution, Mr Radler was a man who had "accepted responsibility"; to Mr Genson and the defence, "David Radler is going to come to this courtroom and lie about Conrad Black to help himself".

It was clear yesterday that the defence strategy will be to paint Mr Radler as the villain of the piece. He had had a largely autonomous role within Hollinger for more than three decades, Mr Genson implied, showing how he had responsibility for running newspapers in western Canada and the US, while Lord Black focused on the eastern Canadian assets and the Telegraph Group in London. Lawyers for other defendants said that Mr Radler told them little about the non-competition clauses from which they benefited, and they did nothing wrong. All sides warned the jurors to set aside any distaste over the large sums of money earned by executives at Hollinger and other big companies.

"We are not here because these guys received $60m," Mr Cramer said. "We are here because they stole $60m. What's the difference? Honesty." The trial continues.