Wednesday, November 7, 2007

Acquittal Motion Denied, Lord Black and Co-Defendants Head Toward Sentencing

U.S. District Judge Amy St. Eve denied the request of Lord Conrad Black and his three co-defendants to acquit them of all charges for which they were convicted in July 2007, although she did grant the motion for one charge for one defendant.  The Judge issued an opinion (available below) finding sufficient evidence for the three mail fraud convictions related to two transactions in which Hollinger International sold newspapers and the defendants received non-compete payments that were not fully disclosed.  In addition, she upheld Lord Black's conviction for obstruction of justice when he tried to remove documents from his office in Toronto that had been subpoenaed by the SEC and were the subject of an Ontario court order prohibiting him from taking the records.  Hollinger's former general counsel was acquitted on one mail fraud charged, with Judge St. Eve finding the prosecution's evidence, primarily from former Black lieutenant David Radler, actually showed he had no involvement in the payment or any intent to defraud.  The mail fraud counts involve both money/property and right of honest services theories, and the latter will be subject to challenge on appeal.  The defendants' new trial motions were also denied

With the acquittal (and new trial) motions out of the way, the final step will be the sentencing of the four defendants, currently scheduled for November 30.  Judge St. Eve asked the parties to submit their views on what version of the Federal Sentencing Guidelines should be applied in the case -- the 2000 edition, which was in effect when the mailings occurred, or the current 2007 edition.  This is an important issue because of the impact it will have on calculating the Guidelines sentence recommendation.  Because the Guidelines are now advisory after Booker, the Seventh Circuit allows a trial judge to use the current version if that results in a reasonable sentence, without concerns about ex post facto issues because the Guidelines are no longer mandatory.

Lord Black submitted a brief (available below) that highlights the differences between the two sets of Guidelines, assuming the loss calculation is based on the total amount of the payments in the counts of conviction.  In 2001 and 2003, there were substantial increases in the enhancements for losses from fraud and for convictions of executives of publicly-traded companies.  Under Lord Black's analysis, the difference on those two issues alone is eight levels, which means the sentence could go from 33-41 months under the 2000 version to 78-97 months under the 2007 version.  Needless to say, the prosecutors argue for the current edition of the Guidelines (brief available below).

The parties have not yet filed their briefs on the recommended sentence that the Probation Office will submit, so its too early to tell the likely sentences each side will propose, and any grounds for departures.  I expect the government to seek at least eight years for Lord Black under the Guidelines, and to argue for an upward departure based on the obstruction of justice and abuse of his position as CEO of Hollinger.  Lord Black and the others are likely to seek a downward departure from the Guidelines calculation, and probably will ask for probation or a split sentence, perhaps a double-nickel (five months in prison, five months home confinement). 

Another issue Judge St. Eve will have to decide is whether to grant the defendants bail pending appeal.  Her opinion makes it clear that she does not see any problems with the convictions, rejecting all of the defense arguments on sufficiency and evidentiary issues.  That may signal a denial of bail, but it remains to be seen.  (ph)

Download us_v_black_opinion_acquittal_motion_nov_5_2007.pdf

Download us_v_black_sentencing_guidelines_brief_black_nov_5_2007.pdf

Download us_v_black_sentencing_guidelines_brief_us_nov_5_2007.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/11/acquittal-motio.html

Fraud, Prosecutions, Sentencing | Permalink

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