Publisher charged for 'looting' empire

CHICAGO - Newspaper publisher Conrad Black and former associates have been charged with fraud by United States prosecutors, who have accused them of looting the now-shrunken Black empire.

The mail and wire fraud indictment alleges the executives illegally dealt themselves millions of dollars from the US$2.1 billion ($3.08 billion) sale of hundreds of Canadian newspapers, and that Black, 61, also misused corporate perks by taking the company jet to Bora Bora for a vacation and spending more than US$60,000 on a birthday party for his wife.

"What has happened here has been the grossest abuse by officers or directors and insiders," US Attorney Patrick Fitzgerald said.

"By lining their pockets they went about a course of conduct where they ... never told the audit committee or the board of directors, or through them the shareholders, what was going on and how they were self-dealing and taking money from the shareholders for themselves."

Prosecutors said they would seek the forfeiture of at least US$80 million from Black and the others. Arrest warrants were issued for Black and the former executives but officials said they would be allowed to make a voluntary court appearance in Chicago's federal court.

The Canadian-born Black, a flamboyant conservative who is a member of Britain's House of Lords, and the others were accused of siphoning money from Black's former empire through a scheme that impacted on the publishing company, US-based Hollinger International, and Toronto-based holding company Hollinger.

Also charged were three former Hollinger executives - John Boultbee, Peter Atkinson and Mark Kipnis, Hollinger International's in-house lawyer. Each count carries a maximum penalty of five years in jail and a US$250,000 fine.

- REUTERS