Risk Management

Former Hollinger CFO Indicted with Black

Ex-media mogul and CFO were each charged with eight counts of mail and wire fraud.
Stephen TaubNovember 18, 2005

Former Hollinger International chief financial officer John Boultbee, former chairman and chief executive officer Conrad Black, and two other executives have been indicted for stealing $51.8 million from the company. They were accused of wire fraud and mail fraud in an 11-count expanded indictment, according to an announcement from the U.S. Attorney, Northern District of Illinois.

The other two indicted executives were former general counsel Peter Atkinson and former corporate counsel Mark Kipnis. Boultbee was also CFO at Ravelston Corp., which holds a controlling interest in Hollinger. Ravelston was indicted earlier this year, according to an announcement made by U.S. Attorney Patrick Fitzgerald.

The most recent indictment seeks forfeiture of at least $80 million from the four individuals. More than $8.5 million in net proceeds was seized last month from the sale of Black’s Park Avenue apartments and Florida home.

Boultbee and Black were each charged with eight counts of mail and wire fraud. Atkinson was charged with six counts of mail and wire fraud, while Kipnis was charged with nine counts of mail and wire fraud. The court noted that each fraud count carries a maximum penalty of five years in prison and a $250,000 fine.

Ravelston faces the same seven counts of mail and wire fraud that were initially brought against the Canadian company in August.

The indictment alleges two new fraud schemes in addition to realleging a separate scheme first cited in an August indictment that charged defendants with fraudulently diverting more than $32 million from the U.S.-based Hollinger newspaper holding company through a complex series of self-dealing transactions. Hollinger owns The Chicago Sun-Times, among other properties.

The first new charge asserts that individuals purportedly diverted an additional $51.8 million in 2000 from Hollinger International’s sales of assets to CanWest Global Communications Corp. The second charge alleges that Black and Boultbee misused corporate perks. According to the attorney general’s office, the perks included using company funds to pay for Black’s use of a corporate jet to fly him and his wife to Bora Bora for vacation, a $40,000 birthday party for Black’s wife at a posh New York City restaurant, and the purchase and renovation of two separate Park Avenue apartments.

“Insiders at Hollinger — all the way to the top of the corporate ladder — whose job it was to safeguard the shareholders, made it their job to steal and conceal,” said Fitzgerald in a statement.

4 Powerful Communication Strategies for Your Next Board Meeting