Feds: Conrad Black should stay in prison during appeal

Conrad Black, the imprisoned ex-Hollinger International Inc. chief executive officer found guilty of fraud and obstructing justice, isn’t entitled to bail as an appeals court reviews his conviction, prosecutors argued.

Black, 65, last week asked the U.S. Court of Appeals in Chicago to free him while it reviews his conviction in light of last month’s Supreme Court ruling that narrowed the scope of a federal law making it a crime to deprive someone of the right to “honest services. ť

The government said yesterday in court papers that Black’s trial jury had proof that the former CEO committed fraud involving money, not just the deprivation of honest-services.

Prosecutors “presented the honest-services fraud theory to the jury based on the same fraudulent conduct that supported the money-fraud theory, ť the Justice Department told the court. The jury had sufficient evidence to convict either way, they said. Black shouldn’t be freed because he’s unlikely to win the appeal, they said.

The honest-services fraud law was used to prosecute corporate officers and public officials who the government said had cheated shareholders and taxpayers. Ex-Illinois Governor Rod Blagojevich is facing honest-services fraud charges in a criminal trial in the U.S. courthouse where Black was convicted.

Black and former Enron Corp. CEO Jeffrey Skilling were convicted after trials based in part on that charge. Since March 2008, Black has been serving a 6 1/2-year sentence at a federal prison in Coleman, Florida.

“The Supreme Court has now unanimously ruled that a violation affecting Mr. Black’s Sixth Amendment jury trial right occurred, ť wrote defense attorney Miguel A. Estrada of the Washington office of Los Angeles-based Gibson Dunn & Crutcher LLP.

Estrada told the court Black’s conviction must be set aside unless the court is certain the jury’s verdict couldn’t be attributed to instructions they received from the trial judge on the honest-services law.

Black and three associates were found guilty in the theft of $6.1 million from Hollinger International as they engineered its sale of assets. The company was once the world’s third- largest publisher of English-language newspapers.

The case is U.S. v. Black, 07-4080, U.S. Seventh Circuit Court of Appeals (Chicago).