Radler Sentenced for Fraud

U.S. District Judge Amy St. Eve sentenced former Chicago Sun-Times publisher F. David Radler to 29 months in prison for taking millions of dollars in unauthorized payments from the tabloid's parent company.^[1]

St. Eve accepted the plea agreement between Radler and federal prosecutors that gave him a reduced sentence in exchange for pleading guilty and cooperating with government's investigation of a mail fraud scheme at Hollinger International Inc; in addition e was fined $250,000.^[2] Radler has paid $53 million to Hollinger International in restitution and as part of settlements with the Securities and Exchange Commission and civil lawsuits.^[3]

St. Eve acknowledged Radler's attempts to right things by cooperating with prosecutors and paying back $61 million.^[4] For his cooperation, Radler cut his possible jail term in half. Under the plea agreement, Radler can also request to serve his time in his native Canada, in which case he could serve as little as six months.^[5]

Radler testified against his former colleagues during a nearly four-month trial that ended in July with their fraud convictions; a jury also found Black guilty of obstructing justice for removing 13 boxes from his Toronto office during the investigation, an infraction that was caught on tape.^[6]

Radler was the only senior executive charged by the government who pleaded guilty.^[7] His long-time business partner Conrad Black received 78 months in prison last week for his role in the scheme.^[8] Co-defendants John Boultbee and Peter Atkinson received 27 months and 24 months, respectively.^[9] The fifth executive, Mark Kipnis, received five years of probation and will not go to prison.[10]

Radler's affiliation with Black began nearly 40 years ago when he was 27 and Black was 25. Since then the two men built a massive media empire that at its peak had more than 300 papers, including the Chicago Sun-Times, the London Daily Telegraph and the Jerusalem Post.^[11] But allegations of fraud arose after shareholders questioned payments made to Black, Radler and others in connection with the sale of Hollinger newspapers.^[12] In September 2005, Radler pleaded guilty to helping loot the company of more than $32 million.^[13]

Radler asserted that the payments were disguised as compensation for Hollinger International's promise not to open rival newspapers to compete with the papers that were being sold; furthermore he admitted there was no legitimate business reason for the payments other than to steer money to himself and others.^[14]

He was on the witness stand for eight days, and testified that Black initiated the payments, while they both deliberately kept the company's audit committee in the dark about the transfers.^[15] He also endured punishing attacks to his credibility and character under cross-examination; federal defense attorneys for the defendants called him a serial liar and a turncoat who cut a sweetheart deal to reduce his punishment.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and a further discussion of the Conrad Black case can be found here, and here.

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^[1] Ameet Sachdev, Former Sun-Times publisher Radler sentenced to 29 months for fraud, Chicagotribune.com, December 17, 2007, available at http://www.chicagotribune.com/business/chi-071217radler-sentencing,0,5990462.story?coll=chi-newslocal-utl (last visited December 17, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] Id.
^[15] Id.