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CHICAGO - A lawyer accused of helping former media kingpin Conrad Black skim millions of dollars from one of the world's largest media companies made honest mistakes but is not guilty of fraud, his attorney told a jury this afternoon.
Mark Kipnis, 60, a former general counsel for Black's Hollinger International, was an outsider unfamiliar with the newspaper business and public companies who "did the best he could with the information he had, given his experience," attorney Ron Safer said.
"He's not perfect, perhaps he's negligent," Safer said. But accepting a bonus for one of the non-compete payments in question "was an honest mistake," he added, during the second day of the criminal fraud trial for Black, Kipnis and two other former associates of Black.
On Tuesday, US prosecutors in opening statements in US District Court labeled all four defendants as greedy thieves who stole US$60 million ($85 million) from the Chicago-based company -- now called the Sun-Times Media Group Inc. -- as it sold off most of its newspapers and other properties from 1998 to 2001.
Black is charged with fraud, racketeering, money laundering and obstruction of justice that could result in a maximum prison sentence of 101 years, plus millions in fines and US$92 million in possible forfeitures.
Government prosecutor Jeffrey Cramer, in his opening statement on Tuesday, had described Kipnis as the man on the inside, the point of contact with the company's audit committee who did not receive the money in question directly but was paid a bonus for his actions.
Kipnis and the other defendants, accountant Jack Boultbee, 63, and Hollinger lawyer Peter Atkinson, 59, are charged with lesser offenses. Kipnis is accused of accepting a US$100,000 bonus from one deal that Black and long-time partner David Radler signed to agree not to compete in a market where they sold a property.
Gustave Newman, Boultbee's lawyer, told the jury on Wednesday that the deals questioned by the government were common knowledge to a large number of people inside and outside of Hollinger -- so many that they would fill a courtroom twice the size of the one in which the trial is being held. Yet, he said, no one raised a red flag.
Prosecutors claim such non-compete fees should have gone back to Hollinger as profits for its investors and not into the pockets of Black and the others. Radler pleaded guilty more than a year ago under an agreement requiring him to pay a US$250,000 fine and serve 29 months in prison.
Black and Radler were ousted from Hollinger in 2003 and 2004 after an internal committee at the company accused them them of theft.
The government later called its first witness, Gordon Paris, Black's successor at Hollinger and the leader of the internal probe that blasted Black for running a "corporate kleptocracy,"
He described how Black personally asked him to join the company's board as an independent director after he'd worked with Hollinger as a banker for many years. His testimony, which will continue on Thursday, had no shocking revelations.
Prosecutors had Paris explain to jurors how Black managed, through a tangled corporate structure, to be a controlling shareholder in Hollinger despite owning a minority of its shares.
Hollinger once published hundreds of newspapers including the Daily Telegraph of London and the Jerusalem Post.
During his opening statement in defence of Black on Tuesday, lawyer Edward Genson said it would have been hard for Black and the others to deceive the Hollinger board, which included such high-profile figures as former Pentagon official Richard Perle and former secretary of state Henry Kissinger.
"These were not people you could go in and trick or bully," Genson said.
Both Kissinger and Perle have been mentioned as possible witnesses in the trial, which may last for four months.
The 62-year-old Canadian-born Black was appointed a member of Britain's House of Lords in 2001, renouncing his Canadian citizenship in the process.
- REUTERS
