A US judge has sentenced former media mogul Conrad Black to six and a half years in prison for obstructing justice and defrauding shareholders of one-time newspaper publishing giant Hollinger International Inc.
The Canadian-born member of Britain's House of Lords was also fined $125,000. In July he was found guilty of one count of obstructing justice and three counts of fraud.
Black, 63, has protested his innocence, claiming he was the victim of 'corporate governance zealots', and promised to appeal the jury verdict reached in July.
His troubles began after Hollinger International, the US-based holding company which controlled the empire, began selling off its Canadian and US publications.
Black and his associates inserted themselves into non-compete clauses tied to the sales agreements.
While these agreements are typical in media transactions - they protect the new owners from having Hollinger launch new publications to compete with the ones it had just sold - they were not all cleared by Hollinger's board and were essentially massive tax-free bonuses for Black and his associates.
Shareholders began to complain about the bonuses in 2002 as Hollinger posted massive losses but Black remained defiant, telling one shareholder to sell his shares and 'get out' if he had a problem with the way things were being run.
Black was eventually forced to launch an independent, internal investigation headed by former SEC chairman Richard Breeden, who dubbed Hollinger a 'corporate kleptocracy' and claimed that more than 95% of the company's net income was lost in bonuses to senior executives between 1997 and 2003.
Black was convicted of obstruction of justice charge because he was caught on tape loading 13 boxes of documents from his Toronto office into his car after the US Securities and Exchange Commission notified him he was under investigation.
