Wednesday, August 15, 2007

Prosecutors Seek $16,925,000 Forfeiture From Lord Black

Federal prosecutors filed a brief (available below) in the U.S. District Court seeking a forfeiture order for $16,925,000 against Lord Conrad Black and two co-defendants, Peter Atkinson and Jack Boultbee, arising from their fraud convictions related to diverting funds from Hollinger International.  While the jury acquitted the defendants on most of the charges, they were convicted on mail fraud charges arising from a series of sales of community newspapers from 1998 through early 2001 in which they diverted funds by taking a portion of the proceeds for themselves as non--compete payments.  Prosecutors calculate the total amount taken from Hollinger in the transactions was $32,150,000, but because of an amendment in the asset forfeiture law in 2000, they are only seeking the funds generated after the law changed to avoid any ex post facto problems.

The U.S. Attorney's Office asked the court to order the forfeiture of the remaining proceeds from the $8.5 million sale of Black's New York apartment and his Palm Beach property that has been used to secure his bail.  In addition, prosecutors asked for the forfeiture of Atkinson's property in Napa, California.  If those assets do not satisfy the total judgment, then they can seek substitute assets because this case involves criminal forfeiture, which is not limited to obtaining money or property traceable to the fraud.  Needless to say, the defendants will fight the forfeiture.

The government's forfeiture argument sheds light on what prosecutors will argue is the appropriate sentence for Black and the other defendants under the Federal Sentencing Guidelines.  Because the transactions occurred before the major increase in the Guidelines sentences for fraud cases in November 2001, the applicable provision will be under a more lenient version in effect at the time of the transactions.  Under that version of the Guidelines -- Section 2F1.1 -- the base offense level is 6, and the loss to Hollinger of more than $20 million adds 16.  In addition, prosecutors will likely seek two point enhancements for more than minimal planning and abuse of a position of trust, and for Black they almost certainly will ask for a two-level increase for obstruction of justice, based on his conviction on that count.  Calculating an offense level of 28, that would put Black's sentencing range at 78 to 97 months, i.e. 7 to 8 years.  If he were sentenced under the November 2001 version of the Guidelines, the potential prison term would be in the range of 10 years.  Not that it needs to be repeated, but Black's lawyers will certainly dispute the loss calculation, and look for them to argue for a significantly lower sentence, perhaps even home detention -- somewhere outside the United States, no doubt. (ph)

Download us_v_black_government_motion_for_preliminary_order_of_forfeiture_aug_13_2007.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/08/prosecutors-see.html

Fraud, Prosecutions | Permalink

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