Conrad Black, the former head of Hollinger Inc. (OTC: HLGAF), was sentenced today. Hollinger is the parent company of the Chicago Sun-Times and numerous other newspapers.The crime: Black was convicted (along with three other former executives of the company) of 3 counts of financial fraud for illegally receiving money from newspaper sales. He and two other executives got at least $32.2 million via their scheme, although the jury determined that Black had illegally received $2.9 million.
The prosecution: Prosecutors wanted Black to go to prison for 19 to 25 years, presumably to both protect the public from him and to deter other executives from committing similar crimes.
The defense: Defense attorneys said Black should get a very lenient prison term, and maybe spend no time in prison. In any event, they said Black shouldn't get any more than the 29-month prison term than his former business partner F. David Radler agreed to when he pleaded guilty and cooperated with prosecutors.
The sentence: 78 months in prison, a $6.1 million forfeiture of ill-gotten gains, and a $125,000 fine. Judge Amy St. Eve handed down this sentence, which included the minimum amount of prison time Black could have gotten.
In his statement to the judge, Black said he had "profound regret" for the shareholder losses, but didn't apologize for what he did. Prosecutors thought that Black should get a harsher sentence for not showing any remorse.
Black must serve at least 85% of his prison term, which would make him first eligible for parole in 2012.
This case highlights the problem of disparity in sentencing convicted white collar criminals. While the federal sentencing guidelines are supposed to bring some uniformity to the process, judges still have a great deal of leeway. Human nature dictates that personal values and beliefs will play a part in the process of sentence. This judge clearly thought the defendant deserved a sentence on the low end of the spectrum. There are surely many outsiders who feel differently.
Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.
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