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Feds Seize Conrad Black's Apt. Sale Proceeds
Newspaper tycoon Conrad Black’s troubles continue to mount – the U.S. attorney’s office has seized about $8.9 million of the proceeds from his sale of a Manhattan apartment as investigators probe transactions by former executives at his publishing company. Officials contend that Black defrauded his holding company, Hollinger International, by acquiring the property at an artificially low price and selling it for a handsome profit. Federal prosecutors said in an affidavit that Hollinger bought the Park Avenue second-floor apartment for $3 million in December 1994, and gave Black use of the premises, according to the Wall Street Journal. Then in January 1998, Black bought the ground-floor apartment at the same address for $499,000.
Story Continues Below And in December 2000, Black acquired the second-floor apartment for $3 million. That transaction was "fraudulent,” the affidavit states, because due to a sharp increase in real estate values in that area over the previous six years, it should have been valued at about $5.4 million. At the same time, Black transferred the ground-floor apartment to Hollinger for $850,000, when according to the affidavit it should have been worth only $700,000 to $800,000. Black agreed to sell the second-floor apartment in June for $10.5 million. The seized funds will be frozen pending a trial or other adjudication, according to the U.S. attorney’s office.
Black’s lawyer Greg Craig said in a statement: "There was no fraud and the federal government will soon be paying it all back, with interest.” Canadian-born Black once owned the world’s third-largest newspaper empire, which included the Chicago Sun-Times and hundreds of local papers in the U.S. He became a subject of controversy after he lost control of Hollinger International and the new management accused him of taking $300 million from the company to bankroll an extravagant lifestyle. He faces Securities and Exchange Commission charges as well as a lawsuit from Hollinger. Randall Samborn, a spokesman for the U.S. attorney’s office in Chicago, said the "criminal investigation into the corporate conduct of Hollinger executives is continuing.”
Editor's note:
Read more on this subject in related Hot Topics: Inside Cover Stories
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