The trial of former Telegraph proprietor Lord Conrad Black is expected to plumb new depths of acrimony this week, when his former ally and business partner David Radler gives evidence against the embattled peer.
Radler will tomorrow appear as a star witness for the prosecution, which accuses Black of 14 counts of fraud and racketeering. Black denies the charges.
Radler has promised to deliver his story of his alleged conspiracy with Black and three other defendants to defraud the shareholders of Hollinger International, Black’s American newspaper company, of $60m (£30m).
In 2005 Radler signed a 33-page “plea agreement” with Chicago’s prosecutors. In return for testifying that Black was involved in the fraud, Radler will serve only 29 months in a Canadian “country-club” prison and pay a $250,000 fine. He has already paid $63m in fines and restitution to the Securities and Exchange Commission and civil claimants.
Radler says that between January 1999 and May 2001 he and others “participated in a scheme to defraud International’s public shareholders of money, property and their intangible right of honest services”. They lied to Hollinger’s independent directors and made “materially false” declarations to shareholders and US regulators, he claims.
Radler and Black worked together from 1969, building Hollinger International into the world’s third-largest newspaper group.
The two men fell out in the early 1990s. Between 1998 and 2000, the duo sold off their empire in Canada and the US, raising more than $3 billion.
Prosecutors say both men skimmed off millions of dollars from sales in phoney “noncompete” payments. Noncompete clauses are common in sales agreements to prevent the seller immediately establishing a rival business.
Radler’s plea agreement says that to channel the money to themselves, he obeyed an order given by telephone “ultimately made by the chairman” – in other words, Black – to divert money from Hollinger International to Hollinger Inc, Black’s Canadian company.