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Supreme Court to hear Conrad Black fraud appeal

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The US Supreme Court on Monday granted certiorari in Black v. United States, appealing the fraud conviction of Canadian-born former media mogul Conrad Black. The Court will determine whether the "honest services" clause of 18 USC § 1346 applies in cases where there is no finding that the defendant or defendants "reasonably contemplated identifiable economic harm" in cases of mail and wire fraud under § 1341. In 2007, Black was convicted of mail fraud and obstruction of justice and sentenced to 78 months in prison. The US Court of Appeals for the Seventh Circuit initially rejected Black's appeal, holding that § 1346 may be applied in a private setting regardless of whether the defendant's conduct risked any foreseeable economic harm to the victim. Black's lawyers argued that: the government could not remotely meet its burden of proving harmlessness beyond a reasonable doubt given the virtual certainty that the jury relied on a seriously flawed instruction that would have been instructional error in at least five other circuits.Consistent with the language of the information and the case law in several circuits, petitioners sought an instruction that would have precluded the jury from convicting of "honest services" fraud unless it found that the alleged scheme contemplated gain to petitioners at the expense of the purported victim.Black's lawyers also argued that the circuit courts are deeply divided on whether or not the honest services clause applies to purely private activity since such fraud has usually dealt with public corruption by government actors. The outcome of the Court's review may affect other high-profile corporate fraud cases such as that involving Enron ex-CEO Jeffrey Skilling.Black, former chairman of Hollinger International, originally faced 17 counts of fraud, obstruction of justice, racketeering and tax evasion. He was accused by the US government of diverting more than $80 million from the company and its shareholders during Hollinger's $2.1 billion sale of several hundred Canadian newspapers. Last year, Hollinger International agreed to pay $21.3 million to settle claims by the US Securities and Exchange Commission (SEC) that it violated securities law by failing to disclose to investors payments and other transactions that benefited the executives to the detriment of the company.

Full post as published by JURIST - The Paper Chase on May 19, 2009 (boomark / email).