Yogi
09-20-2005, 09:45 PM
CANADIAN PRESS
MONTREAL — The first person convicted of fraud in the federal sponsorship scandal will be going to school instead of prison.
Advertising executive Paul Coffin was sentenced today to a conditional sentence of two years less a day, to be served in the community, for defrauding Canadian taxpayers of $1.5 million. Coffin pleaded guilty earlier this year to 15 fraud charges.
Coffin must obey a 9 p.m. curfew — but only on weeknights — and give lessons on business ethics.
His first lecture is set for McGill University next week.
Justice Jean-Guy Boilard of Quebec Superior Court said he allowed Coffin to avoid jail after considering his clean record, his repayment of $1 million to the federal government, and his remorse.
“Mr. Coffin is genuinely contrite but unfortunately he cannot turn the clock back,” Boilard said in court as Coffin stood in the prisoner’s box to hear his fate.
“In my view, the risk of reoffending is extremely minimal, I would dare say inexistent.”
Boilard said the shame of being branded a convicted criminal is an important part of the sentence. He noted that Coffin, a widower, mortgaged his house, cashed retirement funds and borrowed $500,000 from friends and family to repay his debt.
“His indebtedness is steep,” Boilard said. “His business is in ruins and the rest of his life will be spent repaying his debts.”
Coffin must also hire an independent controller to approve all billing and invoices for his advertising business.
Public Works Minister Scott Brison issued a statement Monday saying the government has now recovered the full amount from Coffin.
Conservative justice critic Vic Toews said the sentence, which he called "hardly an inconvenience" for Coffin, sets a dangerous precedent for other sponsorship prosecutions.
"The only message this sends out is that if you can get away with it, that's fine; if you get caught, you just have to repay the money," he said in an interview.
"What has to be sent out is a message of general deterrence to the public. If you (defraud) the government, you go to prison. The judge has taken a really narrow view of the significance of this."
Coffin, 63, appeared to sigh in relief as the sentence was imposed but he refused to comment as he walked to the court office to turn in his passport and sign papers.
The Crown had asked for a 34-month prison sentence and will consider an appeal, prosecutor Francois Drolet said outside court.
“Our position was that this would not send a clear enough message,” Drolet said.
“This in our view sent a strong shockwave in the community that needed a deterrent message.
“The court does not share that opinion.”
Coffin’s lawyer had suggested the 24-month sentence after his client pleaded guilty in May to defrauding the federal government of the $1.5 million between 1997 and 2002 for doing little or no work.
Coffin was just one player in a program that allegedly saw $100 million in sponsorship funds go to ad agencies friendly with the governing federal Liberals.
In a hearing in August, Coffin said he had no idea anything was wrong with his sponsorship contracts until the federal Public Works Department wanted to review them in 2003. The RCMP raided his office later that year.
He surrendered to the RCMP on Sept. 10, 2003, after learning they wanted to talk to him.
Coffin said he co-operated with investigators and was honest in testimony to the Gomery commission into the program because he heeded his mother’s advice to him as a 10-year-old that “honesty is the best policy.”
The sponsorship program was supposed to promote national unity, especially in Quebec, in the wake of the 1995 referendum.
Chuck Guite and Jean Brault face an Oct. 3 trial on five fraud charges and one conspiracy charge each for alleged crimes related to the program. Brault owned an advertising agency while Guite was the bureaucrat in charge of the program.
Justice John Gomery’s initial report is to be released Nov. 1.
...and then there's Conrad ("Con" for short?) Black's second fiddle who got this....
CHICAGO (CP) - A former top executive in Conrad Black's crumbled media empire pleaded guilty Tuesday to mail fraud and agreed to a lighter-than-expected prison sentence for his testimony against others in an alleged scheme to pilfer more than $32 million US from Hollinger International Inc.
David Radler, the newspaper holding company's ex-chief operating officer, agreed Tuesday to a 29-month jail term and a $250,000 US fine in a deal with the U.S. Attorney for pleading guilty to one count of mail fraud in federal court.
Six other counts against the Canadian-born former publisher of the Chicago Sun-Times will be dropped.
"This is the first step in making amends for what has taken place," Radler's lawyer, Anton Valukas, said after studying a small typed note containing Radler's prepared comment during an elevator ride down to the courthouse floor.
"He is sorry and saddened by the pain he has caused his associates and his family and this is the time for him to move on and make amends and he intends to do so."
Radler, 63, will be sentenced after other cases related to the alleged fraud are wrapped up. He has agreed to co-operate with authorities and testify if required.
"It is absolutely possible that it could be years before Mr. Radler is sentenced," former SEC enforcement lawyer and former U.S. federal prosecutor Jacob Frenkel said in an interview.
"The hammer over the co-operator's head is the importance of the prosecutor giving full credit for the co-operation at the time of sentencing."
U.S. Attorney Eric Sussman, who is prosecuting the case, said in an interview Tuesday that "we haven't even wrapped up our investigation yet." He declined to say how long that might take.
While there was no indication when a judge would sentence Radler, the plea agreement stated that "should the criminal proceeding(s) in which the defendant's testimony is required by the government become inordinately delayed, the government will agree to proceed with the sentencing of the defendant."
The U.S. Attorney's Office has alleged that Radler, Black's former right-hand man, supervised negotiations of newspaper sales through which he and other Hollinger managers pocketed millions of dollars in fees that should have gone to the company.
Radler was widely expected to plead guilty and possibly testify against Black - should charges be laid against his former associate and friend - who was Hollinger International's chairman and CEO.
Black has not been charged with any wrongdoing although he faces a criminal investigation by U.S. and Canadian authorities.
Radler, holding company Ravelston Corp. and former Hollinger in-house lawyer Mark Kipnis were each charged with five counts of mail fraud and two of wire fraud in August. Kipnis, 58, pleaded not guilty and is free on a $250,000 US bond.
They were accused of diverting $32 million US through a series of secret deals by disguising the money as noncompete fees connected to the sale of U.S. newspapers to other companies - legal arrangements commonly used in the publishing industry
Radler is now free on a $500,000 US bond which he secured with $50,000 cash. He is allowed to travel to his Vancouver home and will not be extradited from Canada as long as he attends his U.S. court appearances voluntarily. His next appearance is scheduled for Nov. 7.
While Black was the high-profile face of the Hollinger publishing empire, it was Radler who did much of the work building the company begun in the 1960s with the purchase of the Sherbrooke Record in Quebec into Canada's biggest newspaper chain.
The son of a Montreal restaurant owner, Radler was the hard-nosed manager who made the cuts that helped produce the cash to build the Black-controlled company into a global publisher which also owned the London Telegraph, the Jerusalem Post in Israel and Chicago Sun-Times.
The former Southam newspapers in Canada bought by Hollinger in the mid 1990s were sold to CanWest Global Communications in 2001 for $3.2 billion Cdn.
The 32-page plea agreement revealed in court states that Radler "has clearly demonstrated a recognition and affirmative acceptance of personal responsibility for his criminal conduct."
On Tuesday, judge Amy St. Eves asked the former high-powered newspaper executive a series of humbling questions to determine whether he was mentally fit to enter his plea.
Asked whether he was in good health, Radler replied: "I hope so." Questioned about possible substances affecting his decision-making ability, Radler told the court he had one drink the previous evening and half a sleeping pill before bed.
Radler's plea agreement also states that if he files an application for the International Prisoner Transfer Program, the government will not oppose it. That means Radler could potentially serve his sentence in a Canadian prison.
Sussman declined to say whether Radler had requested that part of the agreement. The plea moves the Hollinger saga into the criminal arena, and a U.S. Securities and Exchange Commission civil action against Hollinger and its directors has been stayed "pending the outcome of any future criminal actions," an SEC official said Tuesday.
"We at the SEC are gratified to see this guilty plea and the co-operation he's pledged with the Securities and Exchange Commission in our action," said Tim Warren, the commission's associate regional director.
The SEC's case named not only Radler, but Black as well.
"We've alleged that there was significant harm to public shareholders in this situation," Warren said. "Millions of dollars in non-competition fees amongst other related parties transactions were pocketed by Mr. Radler and, as we've alleged in our action, by Conrad Black."
Radler will be "asked to testify truthfully in the government's case as well as the SEC's case, and co-operate with it in preparation," he said.
Asked whether Radler will testify against Black, Warren would say only "he may be asked to testify in future actions. . . for that, we will have to stay tuned."
At least one major Hollinger shareholder, Eugene Fox of Greenwich, Conn.-based Cardinal Capital Management, turned out to watch the Chicago proceedings.
Ravelston - a privately held Canadian company that Black and Radler used to control Black's newspaper empire - went into receivership after they resigned this April. It is the majority owner of Hollinger Inc., the Toronto-based holding company that has voting control over Hollinger International.
Ravelston's arraignment on the charges is set for Thursday.
The counts of mail fraud against Ravelston, Kipnis and Radler stem from documents the defendants were sending in relation to non-compete fees and other matters. Non-compete fees are paid by the buyers of newspapers to ensure the sellers don't set up a competing newspaper in the same market.
For example, Sussman told St. Eves on Tuesday that the U.S. government could prove beyond a reasonable doubt that around Feb. 8, 2001, Radler, Kipnis and Ravelston sent an envelope from Chicago containing non-compete agreements with the American Publishing Co. to the executive vice president of Hollinger Inc. in Toronto, and about $2.9 million US in cheques related to the agreements, in violation of U.S. securities law.
Each count carries a maximum penalty of five years in prison and a $250,000 fine.
© The Canadian Press, 2005
MONTREAL — The first person convicted of fraud in the federal sponsorship scandal will be going to school instead of prison.
Advertising executive Paul Coffin was sentenced today to a conditional sentence of two years less a day, to be served in the community, for defrauding Canadian taxpayers of $1.5 million. Coffin pleaded guilty earlier this year to 15 fraud charges.
Coffin must obey a 9 p.m. curfew — but only on weeknights — and give lessons on business ethics.
His first lecture is set for McGill University next week.
Justice Jean-Guy Boilard of Quebec Superior Court said he allowed Coffin to avoid jail after considering his clean record, his repayment of $1 million to the federal government, and his remorse.
“Mr. Coffin is genuinely contrite but unfortunately he cannot turn the clock back,” Boilard said in court as Coffin stood in the prisoner’s box to hear his fate.
“In my view, the risk of reoffending is extremely minimal, I would dare say inexistent.”
Boilard said the shame of being branded a convicted criminal is an important part of the sentence. He noted that Coffin, a widower, mortgaged his house, cashed retirement funds and borrowed $500,000 from friends and family to repay his debt.
“His indebtedness is steep,” Boilard said. “His business is in ruins and the rest of his life will be spent repaying his debts.”
Coffin must also hire an independent controller to approve all billing and invoices for his advertising business.
Public Works Minister Scott Brison issued a statement Monday saying the government has now recovered the full amount from Coffin.
Conservative justice critic Vic Toews said the sentence, which he called "hardly an inconvenience" for Coffin, sets a dangerous precedent for other sponsorship prosecutions.
"The only message this sends out is that if you can get away with it, that's fine; if you get caught, you just have to repay the money," he said in an interview.
"What has to be sent out is a message of general deterrence to the public. If you (defraud) the government, you go to prison. The judge has taken a really narrow view of the significance of this."
Coffin, 63, appeared to sigh in relief as the sentence was imposed but he refused to comment as he walked to the court office to turn in his passport and sign papers.
The Crown had asked for a 34-month prison sentence and will consider an appeal, prosecutor Francois Drolet said outside court.
“Our position was that this would not send a clear enough message,” Drolet said.
“This in our view sent a strong shockwave in the community that needed a deterrent message.
“The court does not share that opinion.”
Coffin’s lawyer had suggested the 24-month sentence after his client pleaded guilty in May to defrauding the federal government of the $1.5 million between 1997 and 2002 for doing little or no work.
Coffin was just one player in a program that allegedly saw $100 million in sponsorship funds go to ad agencies friendly with the governing federal Liberals.
In a hearing in August, Coffin said he had no idea anything was wrong with his sponsorship contracts until the federal Public Works Department wanted to review them in 2003. The RCMP raided his office later that year.
He surrendered to the RCMP on Sept. 10, 2003, after learning they wanted to talk to him.
Coffin said he co-operated with investigators and was honest in testimony to the Gomery commission into the program because he heeded his mother’s advice to him as a 10-year-old that “honesty is the best policy.”
The sponsorship program was supposed to promote national unity, especially in Quebec, in the wake of the 1995 referendum.
Chuck Guite and Jean Brault face an Oct. 3 trial on five fraud charges and one conspiracy charge each for alleged crimes related to the program. Brault owned an advertising agency while Guite was the bureaucrat in charge of the program.
Justice John Gomery’s initial report is to be released Nov. 1.
...and then there's Conrad ("Con" for short?) Black's second fiddle who got this....
CHICAGO (CP) - A former top executive in Conrad Black's crumbled media empire pleaded guilty Tuesday to mail fraud and agreed to a lighter-than-expected prison sentence for his testimony against others in an alleged scheme to pilfer more than $32 million US from Hollinger International Inc.
David Radler, the newspaper holding company's ex-chief operating officer, agreed Tuesday to a 29-month jail term and a $250,000 US fine in a deal with the U.S. Attorney for pleading guilty to one count of mail fraud in federal court.
Six other counts against the Canadian-born former publisher of the Chicago Sun-Times will be dropped.
"This is the first step in making amends for what has taken place," Radler's lawyer, Anton Valukas, said after studying a small typed note containing Radler's prepared comment during an elevator ride down to the courthouse floor.
"He is sorry and saddened by the pain he has caused his associates and his family and this is the time for him to move on and make amends and he intends to do so."
Radler, 63, will be sentenced after other cases related to the alleged fraud are wrapped up. He has agreed to co-operate with authorities and testify if required.
"It is absolutely possible that it could be years before Mr. Radler is sentenced," former SEC enforcement lawyer and former U.S. federal prosecutor Jacob Frenkel said in an interview.
"The hammer over the co-operator's head is the importance of the prosecutor giving full credit for the co-operation at the time of sentencing."
U.S. Attorney Eric Sussman, who is prosecuting the case, said in an interview Tuesday that "we haven't even wrapped up our investigation yet." He declined to say how long that might take.
While there was no indication when a judge would sentence Radler, the plea agreement stated that "should the criminal proceeding(s) in which the defendant's testimony is required by the government become inordinately delayed, the government will agree to proceed with the sentencing of the defendant."
The U.S. Attorney's Office has alleged that Radler, Black's former right-hand man, supervised negotiations of newspaper sales through which he and other Hollinger managers pocketed millions of dollars in fees that should have gone to the company.
Radler was widely expected to plead guilty and possibly testify against Black - should charges be laid against his former associate and friend - who was Hollinger International's chairman and CEO.
Black has not been charged with any wrongdoing although he faces a criminal investigation by U.S. and Canadian authorities.
Radler, holding company Ravelston Corp. and former Hollinger in-house lawyer Mark Kipnis were each charged with five counts of mail fraud and two of wire fraud in August. Kipnis, 58, pleaded not guilty and is free on a $250,000 US bond.
They were accused of diverting $32 million US through a series of secret deals by disguising the money as noncompete fees connected to the sale of U.S. newspapers to other companies - legal arrangements commonly used in the publishing industry
Radler is now free on a $500,000 US bond which he secured with $50,000 cash. He is allowed to travel to his Vancouver home and will not be extradited from Canada as long as he attends his U.S. court appearances voluntarily. His next appearance is scheduled for Nov. 7.
While Black was the high-profile face of the Hollinger publishing empire, it was Radler who did much of the work building the company begun in the 1960s with the purchase of the Sherbrooke Record in Quebec into Canada's biggest newspaper chain.
The son of a Montreal restaurant owner, Radler was the hard-nosed manager who made the cuts that helped produce the cash to build the Black-controlled company into a global publisher which also owned the London Telegraph, the Jerusalem Post in Israel and Chicago Sun-Times.
The former Southam newspapers in Canada bought by Hollinger in the mid 1990s were sold to CanWest Global Communications in 2001 for $3.2 billion Cdn.
The 32-page plea agreement revealed in court states that Radler "has clearly demonstrated a recognition and affirmative acceptance of personal responsibility for his criminal conduct."
On Tuesday, judge Amy St. Eves asked the former high-powered newspaper executive a series of humbling questions to determine whether he was mentally fit to enter his plea.
Asked whether he was in good health, Radler replied: "I hope so." Questioned about possible substances affecting his decision-making ability, Radler told the court he had one drink the previous evening and half a sleeping pill before bed.
Radler's plea agreement also states that if he files an application for the International Prisoner Transfer Program, the government will not oppose it. That means Radler could potentially serve his sentence in a Canadian prison.
Sussman declined to say whether Radler had requested that part of the agreement. The plea moves the Hollinger saga into the criminal arena, and a U.S. Securities and Exchange Commission civil action against Hollinger and its directors has been stayed "pending the outcome of any future criminal actions," an SEC official said Tuesday.
"We at the SEC are gratified to see this guilty plea and the co-operation he's pledged with the Securities and Exchange Commission in our action," said Tim Warren, the commission's associate regional director.
The SEC's case named not only Radler, but Black as well.
"We've alleged that there was significant harm to public shareholders in this situation," Warren said. "Millions of dollars in non-competition fees amongst other related parties transactions were pocketed by Mr. Radler and, as we've alleged in our action, by Conrad Black."
Radler will be "asked to testify truthfully in the government's case as well as the SEC's case, and co-operate with it in preparation," he said.
Asked whether Radler will testify against Black, Warren would say only "he may be asked to testify in future actions. . . for that, we will have to stay tuned."
At least one major Hollinger shareholder, Eugene Fox of Greenwich, Conn.-based Cardinal Capital Management, turned out to watch the Chicago proceedings.
Ravelston - a privately held Canadian company that Black and Radler used to control Black's newspaper empire - went into receivership after they resigned this April. It is the majority owner of Hollinger Inc., the Toronto-based holding company that has voting control over Hollinger International.
Ravelston's arraignment on the charges is set for Thursday.
The counts of mail fraud against Ravelston, Kipnis and Radler stem from documents the defendants were sending in relation to non-compete fees and other matters. Non-compete fees are paid by the buyers of newspapers to ensure the sellers don't set up a competing newspaper in the same market.
For example, Sussman told St. Eves on Tuesday that the U.S. government could prove beyond a reasonable doubt that around Feb. 8, 2001, Radler, Kipnis and Ravelston sent an envelope from Chicago containing non-compete agreements with the American Publishing Co. to the executive vice president of Hollinger Inc. in Toronto, and about $2.9 million US in cheques related to the agreements, in violation of U.S. securities law.
Each count carries a maximum penalty of five years in prison and a $250,000 fine.
© The Canadian Press, 2005