Friday, August 19, 2005
The former publisher of the Chicago Sun-Times, along with a lawyer for Hollinger International have been indicted. Additionally, the company that controlled Hollinger International - The Ravelston Corp. Ltd. was also indicted. See DOJ press release here. The press release states that the indictment was for "federal fraud charges for allegedly fraudulently diverting from the U.S.-based Hollinger newspaper holding company more than $32 million through a complex series of self dealing transactions."
The 27 page indictment presents seven counts of mail and wire fraud. Interestingly, 18 U.C.S. sec. 1346, the intangible right to honest services is used in the indictment. The charges against in-house counsel are premised on an alleged "fiduciary duty of undivided loyalty to International, which among other things, required [the attorney] to provide honest services to International, to disclose all material facts regarding all related party transactions to International's Audit Committee, and to refrain from assisting others in any breach of fiduciary duty against International."
This case perhaps could have had some interesting issues - for one the corporation is a Canadian company and the former publisher is a Canadian citizen; although the indictment does note that the publisher "often stayed at an apartment in Chicago that was owned by International, and often worked at International's office in Chicago."
But one has to wonder if the indictment is just a prelude to a larger show. According to CNN Money here, the prosecutor stated that Radler, the president and CEO of Hollinger who was indicted, is cooperating with the government.
The indictment can be found here.
See Wall Street Jrl here.
See Chicago Sun Times (AP story) here.
(esp) (w/ thanks to PH for documents)