The hunt for Conrad's cash
TREASURE CHEST | Finding it could prove a challenge
The next big job for Conrad Black's enemies could be finding his money.
Following the former press baron's fraud conviction, the U.S. attorney's office could seek as little as $2.9 million or as much as $60 million from Black in penalty forfeiture, plus a $1 million fine.
Claiming to be a victim of Black's fraud, Sun-Times Media Group Inc. seeks $500 million in a civil suit against Black, his wife Barbara Amiel and others. The company, parent of the Chicago Sun-Times, also is demanding millions in reimbursement of fees it spent on Black's criminal defense -- an obligation the company faced because Black was presumed innocent of crimes perpetrated when he was chairman.
(Scott Stewart/Sun-Times file)
The total is more than $1 billion.
Even if the suits are successful, the government and the plaintiffs might have a tough job getting it back from Black.
His Toronto and Florida mansions are heavily mortgaged, he hasn't held his CEO job since 2003, his privately held Ravelston is in receivership, and his reported public stock holdings amount to less than $3 million.
That doesn't mean Black doesn't have money somewhere -- but finding it is the challenge, according to forensic accountant Al Rosen of Toronto.
"I'd be very surprised if he didn't have assets, but in other people's names, in other companies and in multiple jurisdictions around the world," said Rosen, whose firm is working for Sun-Times Media Group on another issue.
Black, 62, who used to head the company that owns the Sun-Times, was convicted last week along with three other former executives on charges of stealing millions of dollars from the company. At a hearing this afternoon, U.S. District Judge Amy St. Eve will decide whether to revoke Black's $21 million bond, and hold him in prison before his Nov. 30 sentencing.
St. Eve could raise his bond. She asked defense attorneys last week whether Black or his wife had any other assets they could post.
Rosen said it is common for people facing creditors to mortgage important assets, like their homes, and then stick the cash elsewhere.
According to a 2004 Canadian Press report, Black's family home in Toronto's exclusive Bridle Path neighborhood is worth up to $20 million. The Globe & Mail reported that Black owes $13 million on a loan on the home.
The Georgian-style mansion on a 12-acre estate has a three-story elliptical library and a copper cupola modeled on the dome of St. Peter's.
Black's beachfront mansion in Palm Beach, with a movie theater and a poolside cabana, is encumbered by $24 million in liens, according to a 2006 government filing. Black has claimed that it has about $8 million in equity. The mansion is already part of Black's bond.
Also part of Black's bond is $8.6 million seized from the sale of his New York apartment.
The government also seeks in forfeiture a 26-carat diamond ring Black bought for his wife, worth $2.6 million and a $604,435 antique pearl and diamond bow brooch.
The government has expressed frustration in the past with Black not fully reporting his assets. Black's defense lawyers have countered that he reported as completely as he could.
Last summer, U.S. prosecutors accused Black of concealing $6 million he was due to receive from Horizon, a company he owned with longtime partner David Radler. Radler earlier pleaded guilty to fraud.
Rosen said that the U.S. government has the resources to persuade foreign governments to give up the assets of convicted criminals. It has become easier since the Sept. 11 terrorist attacks.
"If the U.S. government went in and said they suspect it's the proceeds of a crime, they could get it in a matter of days," Rosen said.
Black also will be asked to make a financial disclosure statement to the court, noted Jacob Frenkel, a former federal prosecutor with Shulman Rogers in Maryland. If the government finds he lied, he could face additional penalties.
Black plans to appeal his criminal convictions, and has filed his own civil claims.
