- The Washington Times - Monday, June 18, 2007

CHICAGO (Reuters) — Federal prosecutors summing up their fraud case against Conrad Black today can offer the jury two theories to convict the former press baron: that he conceived and led a scheme to bilk millions of dollars from his company, or that he deliberately avoided knowing about it while filling his pockets.

Those two approaches are available because Judge Amy St. Eve of the U.S. District Court in Chicago sided with prosecutors in agreeing to give jurors what is referred to in legal circles as the “ostrich instruction.” This means a defendant can be found guilty if he deliberately avoided learning about wrongdoing, even if the jury thinks he did not hatch the scheme.

That “deliberate avoidance” jury instruction is common in white-collar criminal cases, legal analysts say.

“What it means is it gives the prosecutors a lot more options in arguing the case to the jury,” said white-collar-criminal defense lawyer Lee Dunst, who is following the case.

“One, they can argue Mr. Black engaged in intentional misconduct, and knew what was going on. Or, they can argue … he deliberately closed his eyes to what was going on,” Mr. Dunst said.

“The ostrich instruction is basically giving prosecutors a second bite of the apple,” said Michael Levy, another white-collar defense lawyer and former federal prosecutor.

Mr. Black and three other former executives at Hollinger International Inc. are accused of pilfering $60 million in so-called non-compete payments that rightfully belonged to the publishing giant and its shareholders.

The payments that compensated Mr. Black and the others for agreeing not to compete against buyers of hundreds of publications that were being sold to pay off accumulated debt were essentially non-taxed bonuses they awarded themselves, prosecutors say.

“Prosecutors need to prove that Black had an intent to defraud, and in the absence of a ‘smoking gun’ e-mail, they have to prove that through circumstantial evidence,” Mr. Levy said.

The defense, meanwhile, has tried to show that non-competition agreements are a common business practice and were properly disclosed to Hollinger International’s auditors and approved by its board of directors.

Mr. Black’s attorneys focused on discrediting prosecution witnesses led by his partner of three decades, David Radler, who testified over a two-week period and pinned the scheme on Mr. Black.

Mr. Black, 62, and former Chief Financial Officer Jack Boultbee, 63, also face charges that they abused company perks by allowing Mr. Black to use a company jet on a South Seas vacation and buy a luxury New York condominium owned by the company, among other abuses.

If convicted on all 13 counts, including fraud, racketeering, obstruction of justice and causing Hollinger to file false tax returns, the native Canadian faces decades in a U.S. prison as well as millions of dollars in fines and millions more in forfeitures.

Mr. Boultbee and co-defendants Peter Atkinson and Mark Kipnis, both attorneys for the company, face lesser charges.

The London Daily Telegraph Telegraph, with the Jerusalem Post and the National Post in Canada, which Mr. Black founded, have been sold off. Hollinger International, which ousted Mr. Black, has since been renamed the Sun-Times Media Group.