Conrad Black, the international press baron who gave up his Canadian citizenship to become a British Lord, will soon have a new identity: prison inmate.
The former CEO of Hollinger International was convicted in July of diverting $6.1 million of company funds to himself and members of his inner circle. On Monday, he was sentenced by a federal judge in Chicago to six-and-a-half years in prison, fined $125,000 and ordered to forfeit $6.1 million.
The sentence, to begin in March, was at the low end of guidelines for the charges, but relatively severe given the amount of money involved. Bernie Ebbers, the ex-WorldCom CEO who was convicted in an $11 billion accounting fraud, is serving 25 years in prison; former Enron CEO Jeff Skilling, convicted of misrepresenting his company's true financial condition, is serving a 24-year sentence.
For Black — who at the height of his powers controlled The Daily Telegraph of London, The Chicago Sun-Times and The Jerusalem Post — the prison sentence culminates a spectacular fall from grace. Known in Britain as Lord Black of Crossharbour, the jet-setting newspaper executive served in Britain's House of Lords and befriended leaders such as Margaret Thatcher, Ronald Reagan and Richard Nixon. At Hollinger, his board of directors included Henry Kissinger and former defense policy adviser Richard Perle.
"He did what he did, not for some justification of making his company better, but to enrich Conrad Black," says Jack Coffee, an expert in securities law at Columbia University. "This is a soap opera about a very arrogant man who reached over the head of his board of directors."
Now Black's the latest CEO being sent to jail in the Justice Department's war on corporate crime. But unlike WorldCom and Enron, companies that collapsed, the Black case more closely resembles the criminal case against Dennis Kozlowski, former CEO of Tyco, says Samuel Buell, a former federal prosecutor who teaches at Washington University in St. Louis.
Kozlowski was convicted in 2005 of looting his company of hundreds of millions of dollars. He was given a sentence of eight-and-a-half to 25 years.
Mark Zauderer, a white-collar criminal defense lawyer in Manhattan, says that in a personal way Black's case is similar to those of Ebbers, Kozlowski and others, even if the amount of money was less.
"There is a key protagonist, the CEO, who is found guilty of misusing corporate power for private gain, and took unusual risks, perhaps having lost perspective," says Zauderer. "If you're a very successful and highly compensated CEO in the middle of your life, the two things you should care most about are your good health and your freedom. With Tyco and this and Bernie Ebbers, you have very wealthy principals taking extraordinary risks."
Black plans to appeal his conviction.