- The Washington Times - Friday, August 19, 2005

CHICAGO (AP) — Former Chicago Sun-Times publisher David Radler, an attorney for the newspaper’s parent company and a media holding company controlled by Conrad Black were accused yesterday in a federal indictment of diverting $32 million through a series of bogus deals.

The indictment says the three diverted the money by disguising it in a series of secret deals as non-compete fees connected to the sale of newspaper publishing groups.

Mr. Radler, Mark S. Kipnis, the former top in-house attorney for Chicago firm Hollinger International, and Ravelston Corp., a private Toronto company controlled by Mr. Black, were accused of cheating shareholders in the United States and Canada, as well as Canadian tax authorities.

All three were charged with five counts of mail fraud and two counts of wire fraud. They will be arraigned at a later date.

Prosecutors said Mr. Radler, 63, was cooperating with the government’s investigation and was expected to plead guilty at a later date.

“Shareholders in public companies have a right to expect that their monies will be managed properly by officers and directors and that the officers and directors won’t steal it,” U.S. Attorney Patrick Fitzgerald said in announcing the charges.

No comment was issued by any of the principals involved.

Mr. Radler’s attorney did not return a phone call. Messages left with both Mr. Kipnis and his attorney also were not returned. Hollinger International declined to comment through spokesman Jeremy Fielding. Mr. Black also had no comment, spokesman Jeff McAndrews said.

Hollinger Inc. is the Toronto holding company that has voting control over Hollinger International. Ravelston, the privately held Canadian company that Mr. Black has long controlled, is the majority owner of Hollinger Inc.

The government acknowledged the criminal investigation in court papers when it asked to intervene in a Securities and Exchange Commission lawsuit filed in November against Hollinger Inc., Mr. Black and Mr. Radler.

The SEC said the men engaged in a “fraudulent and deceptive scheme” to take cash and other assets from Hollinger International, the parent company of the Chicago Sun-Times, and conceal the actions from shareholders.

Mr. Black was forced out as chief executive officer and chairman of Hollinger International after an internal review found that he and several associates had improperly siphoned off millions of dollars from the company.

At one time, Mr. Black’s newspaper holdings included the Daily Telegraph, a major broadsheet in Britain that was later sold, and the Jerusalem Post.

Mr. Black also has troubles in Canada, where Hollinger Inc. is based. Canadian shareholders want to wrest control of that company from Mr. Black, who failed in a bid to take that company private.

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