Breaking News

Conrad Black wins release

Former Canadian and U.S. media magnate Conrad M. Black, who won at least a partial victory in the Supreme Court in his criminal case in June, was ordered released “forthwith” from a federal prison in Florida on Wednesday, with bail set at $2 million.  His 78-month prison sentence — he has so far served more than 28  months — will be interrupted while a federal appeals court reviews his case.  The case will be one of the first to test what authority remains for federal prosecutors when they press charges for “honest services” fraud.

In a ruling on June 24 (explained in this post), the Supreme Court sent the Black case back to the Seventh Circuit Court, without itself overturning his convictions for fraud and obstruction of justice for an alleged corporate compensation scheme.  On Monday, the Circuit Court ordered his release while the appeal goes forward.   The Circuit Court acted based upon filings by Black’s attorneys seeking bail, and by federal prosecutors, resisting bail; the bail papers are here, here and here.

U.S. District Judge Amy J. St. Eve of Chicago, who was the trial judge in the case, followed up the Circuit Court’s release order by setting conditions on Black’s freedom and then ordering his release.   He is to appear in her Court on Friday for a status hearing.  (The order specifying conditions  is not yet available.)  UPDATE: While Black is free, he must stay in the U.S. (although the judge held off ruling on whether he could travel to Canada), he cannot apply for a new passport (his has expired), he cannot have a gun, and he had to post the $2 million bond.  The bond was posted immediately.

Black’s case was one of three decided by the Justices on the same day, resulting in significant limitations on federal prosecutors’ power to charge mail or wire fraud, when the claim is that an individual deprived some entity or some person of a duty to provide “honest services.”   The Court made clear that, hereafter, the law can only be used to attack bribery or kickbacks.

In Black’s case, the Court noted that the charges against him did not involve bribes or kickbacks, so it ruled that a jury instruction by Judge St. Eve had been undercut; the judge had told jurors that they could convict Black and other executives of Hollinger International, a newspaper chain, if the executives were found to have misused their positions for private gain or had violated their duty of loyalty to Hollinger.

Still, the Court said that lower courts were free to consider whether the flawed instruction was a “harmless” error.  It also said that Black could raise in lower courts his argument that the evidence to support “honest services” fraud had spilled over to taint his conviction for obstruction of justice.

In seeking bail while the Seventh Circuit considers those issues, Black’s lawyers said that “the issue that now remains for this [Circuit] Court is not whether the government inroduced legally sufficient evidence to secure a conviction absent the error [in the jury instructions] — that is, whether ‘the case could have been won without the error.”  The issue, rather, is wheher the guilty verdict could be traced to that error, they argued.

“In this trial,” the bail memorandum argued, “the jury resoundingly rejected the great bulk of the government’s charges, so it is not remotely probable that the few counts that survived the jury’s deep skepticism of the government’s case to produce this verdict were untainted by the fact that the jury was told that it could convict defendants for conduct that isn’t a crime.”

Prosecutors countered that “there is no substantial question” that the erroneous jury instruction on “honest services” was harmless.  The evidence that supported conviction for “honest services” fraud, the prosecutors contended, “was co-extensive” with charges that Black also committed money fraud.  In fact, they argued, the Circuit Court in previously upholding Black’s conviction against a challenge “has already explained” that the erroneous instruction was harmless.  “Nothing in the Supreme Cout opinion affects that reading of the record,” the government memorandum summed up.

The Circuit Court had sent the case back to Judge St. Eve solely to set conditions on Black’s release.  She held a prompt hearing, and then acted to carry out his release from the federal prison near the small Florida town of Coleman.

The Circuit Court has indicated that it intends to move with dispatch to consider the remaining issues.  In its release order, the Circuit panel said lawyers would be granted no extra time — beyond the 21 days specified by a court rule — to file statements on what issues they want the panel to explore now.