Conrad Black faces more lawsuits as he heads back to jail

Disgraced media tycoon asks Canada to allow him to return at the end of his prison sentence

Stephen Foley
Sunday 26 June 2011 00:00

Conrad Black, the former newspaper mogul ordered back to prison to spend another year in jail, could face a series of lawsuits which threaten financial ruin.

The peer, who used to own The Daily Telegraph, has protested his innocence against convictions in the US for skimming money from his Chicago-based holding company, Hollinger International, and of obstructing regulators' investigations into his affairs. Defiant to the end and beyond, Black said in court on Friday that you would have to believe him "barking mad" to have done the things he was accused of.

But, as he returned to prison to serve another 13 months for fraud and obstruction of justice, it was suggested that his failed attempts to clear his name in court may just be the start of his battles.

First, he has asked Canada, the country of his birth, to allow him to return to Toronto when he is released after being told he will be barred from living in America. If that request for normal immigration rules for convicted felons to be waived fails, he could be forced to live in the United Kingdom.

After the small matter of his residency is resolved, Black then faces contests in the civil courts, where a string of lawsuits will be reactivated in the coming weeks.

The Securities and Exchange Commission, the regulator that polices corporate America, is suing, claiming Black defrauded shareholders. It has already been granted an interim judgment that Black should pay $3.8m (£2.4m), but the case has been stayed for the duration of Black's appeals against his criminal convictions. His defence team must put in its next motions by 1 August.

The US tax authorities, meanwhile, are pursuing Black for $71m in back taxes, penalties and interest payments, and his old company is also suing him for hundreds of millions of dollars, claiming that his crimes led to its collapse. That case resumes in August.

George Tombs, a Quebec-based biographer of Black, said he heard pathos in the peer's courtroom oration, which ran to 20 minutes. "He talked as if he were Napoleon returning from Elba, but the army he claims is made up of inmates from Coleman prison. What kind of army is that? How does a person who has been roundly defeated continue to pretend that defeat is victory?"

Mr Tombs says that Black intimated in a 2006 conversation that he had protected himself financially well enough to ensure funding for these legal actions, but that with up to $1bn in claims against him, he faces an uncertain future.

The writer said: "He has to lay out huge amounts of money in legal fees, and he is not able to earn anything except the 12 to 18 cents an hour he gets teaching English in prison. He has had to sell his place in Palm Beach, and to remortgage the home in Toronto. He has suffered greatly from the meltdown of Hollinger, and he has already paid serious amounts of money back to the US government. Yet I do believe he has considerable resources still."

Black can claim one recent legal victory, a settlement of a libel action he launched against Hollinger and the authors of an internal report that accused him of operating a "corporate kleptocracy". The trustees of the now-bankrupt company decided not to defend the suit.

Black and his wife, Barbara Amiel, have been living in a New York hotel since he sold their Florida mansion for $25m in April.

The Canadian authorities can issue an immigration visa to a convicted criminal after his "rehabilitation", but this is usually only after five years have elapsed.

In court on Friday, Black's lawyers said he was "devastated" at being barred from the US. Carolyn Gurland said: "His daughter lives here; many of his closest friends are here. He is not just a casual observer of this country but, I am reliably told, he can recite the vice-presidents of the US in order. He is writing a third book on US history, and he lectures on US history from memory." He will be a guest of the US government, now, for a while longer – but not much longer.

On Friday, a Chicago court slashed Black's sentence from 78 months in the light of a Supreme Court ruling that voided two of his three fraud convictions. The new 42-month jail term was still more than the 29 he had served before being freed last year, pending resentencing.

His legal team has yet to decide whether to request his return to the Coleman correctional facility in Florida, where he served the first part of his term, or whether to ask for a placement nearer the Canadian border, to make it easier for his sick wife to visit.

Black will be granted the return of his passport so that he can prepare to leave the US as soon as he is released. "Better get the photos done," Judge Amy St Eve joked to his lawyers on Friday.

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