Conrad Black Charged with Fraud

And now, the manoeuvres begin in earnest. With last week's FRAUD indictment, brought by the U.S. Department of Justice against Conrad BLACK and other former Hollinger International executives, speculation gives way to strategy.

Conrad Black Charged with Fraud

And now, the manoeuvres begin in earnest. With last week's FRAUD indictment, brought by the U.S. Department of Justice against Conrad BLACK and other former Hollinger International executives, speculation gives way to strategy. And all of it is built around one central question: will Black ever see the inside of a U.S. courtroom, let alone a prison cell?

He is facing eight fraud-related charges in the U.S. arising from allegations that he orchestrated a scheme to siphon US$84 million from Hollinger International and its shareholders. If convicted on all counts, Black could face 40 years in prison. But his lawyers last week gave every indication that they're prepared for a long fight to clear his name. "Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment," Edward Greenspan said just after the charges were laid. "It will be shown that he has, at all times, acted within the law. He is confident that, if given a full and fair opportunity to defend himself, he will be found innocent." So will Black surrender to U.S. authorities and show up in a Chicago courtroom this Tuesday?

On one hand, legal experts say Black should appear in court to bolster his claims of innocence. "It certainly doesn't look good to try and resist even going there and clearing yourself," said David Paciocco, former prosecutor and law professor at the University of Ottawa. But many others expect Greenspan will tell Black to stay in Canada until all avenues of appeal in this country are exhausted. Assistant U.S. attorney Eric Sussman said Friday, "We are committed to extraditing Mr. Black if he will not appear voluntarily." But that may be much easier said than done.

If Black refuses to surrender, the U.S. will seek to have him arrested by Canadian authorities and commence an extradition hearing. Evidence against him must then be reviewed by a judge, who decides whether it is sufficient. If the answer if yes, the person can be extradited. From there, the file goes to the federal justice minister who decides whether to extradite. At every stage of the process, the decisions can be appealed, which is why extradition applications in Canada often take years to resolve. Another of Greenspan's prominent clients, Garth DRABINSKY, was charged with fraud in the U.S. in 1999 for allegedly inflating earnings of his Livent theatre empire. He refused to appear to face the charges and vowed to fight any attempt at extradition. Drabinsky has not travelled to the U.S. since charges were laid. In 2002, Canada laid fraud charges of its own, and a trial is expected to begin in spring 2007.

Slow as it often is, however, extraditions do happen on a regular basis. In 2004, 42 individuals were extradited from Canada to the U.S. - six of whom went voluntarily. A few people facing American fraud charges have been extradited in the past few years, according to Justice spokesman Patrick Charette, though he declined to reveal specifics. The fact that Black is currently under investigation in Canada has no bearing on the justice minister's decision on whether to extradite. It does, however, raise big issues related to his defence. According to Black's lawyers, the U.S. charges and simultaneous Hollinger probe in Canada threaten his ability to get a fair trial in either country - a problem compounded by the FBI's seizure this summer of US$9 million in real estate proceeds Black had earmarked to pay legal fees.

The tandem investigations have exposed a little-noticed difference between American and Canadian law. Both countries consider protection against self-incrimination to be fundamental to their constitutions. But their protections operate in opposite ways - and may effectively cancel each other out. The gist of the paradox is this: in Canada, people can be forced to testify as witnesses in legal proceedings, but their testimony can be blocked from use should they themselves later face a criminal trial. In the U.S., by contrast, a witness may refuse to answer potentially incriminating questions by pleading the Fifth Amendment (as Black did in December 2003). But once a statement is made in a U.S. investigation, there is little restriction on how it can be used in court. And so the question arises: if a target of investigations in both countries is forced to talk in Canada, can a Canadian judge keep potentially incriminating testimony out of a U.S. prosecutor's hands?

Edward Greenspan says that would be impossible. He has asked for Black to receive a constitutional exemption from answering questions in Canada, to preserve his right against self-incrimination in the U.S. - a move that would stymie the Canadian investigation - but was denied. In a testy opinion last May, Justice Colin L. Campbell said he was more than capable of protecting the testimony and called the request "an affront." His indignation was echoed by a three-judge panel of the Ontario Court of Appeal, which upheld his decision this month.

The judges stressed there are many safeguards: the Canadian investigation is closed-door, and its findings controlled by the court. But Dalhousie University law professor Robert Currie said it's an "open question" whether testimony could realistically be withheld. "American authorities will move heaven and earth," Currie said, "and they will not necessarily go the legal route. A fax machine knows no borders. And all it takes is one disgruntled person to send an email." Furthermore, when Greenspan asked U.S. prosecutors for assurances that they wouldn't use Black's Canadian testimony against him in an American trial, he received "a polite and legalistic f--- off," he says. Black's lawyers are considering fighting it all the way to the Supreme Court if need be, and that could mean Canadian investigations may be stalled, potentially for years.

All that will do little to cool the fervour of U.S. authorities pursuing Black, says Douglas McNabb, a lawyer specializing in U.S. federal criminal defence law. "The U.S. has indicted Mr. Black. The U.S. wants Mr. Black to stand trial in Chicago," he says. "They are going to take whatever legal steps they need to to have him brought to the U.S. to stand trial in the U.S."

Maclean's November 28, 2005