Language Selection

English French German Italian Portuguese Spanish

Ex-Sun-Times Publisher Charged With Fraud

Filed under
Legal

Former Chicago Sun-Times publisher David Radler is cooperating with federal prosecutors in their investigation of $32 million that allegedly was fraudulently pocketed by him and others through a series of secret deals.

Radler, Mark S. Kipnis, the former top in-house lawyer for Chicago-based Hollinger International, and Toronto-based Ravelston Corp., a private company owned until this spring by Conrad Black, were indicted on federal fraud charges Thursday.

They were accused of cheating shareholders in the United States and Canada, as well as Canadian tax authorities. The indictment alleged the three diverted the money by disguising it as noncompete fees connected to the sale of newspaper publishing groups.

Each was charged with five counts of mail fraud and two counts of wire fraud.

Fallen media titan Black, the ousted CEO of Hollinger International, was not accused of wrongdoing.

Prosecutors said Radler, 63, of Vancouver, British Columbia, was cooperating with the government's investigation and was expected to plead guilty.

"Shareholders in public companies have a right to expect that their monies will be managed properly by officers and directors and that the officers and directors won't steal it," U.S. Attorney Patrick Fitzgerald said in announcing the charges.

Radler's attorney did not return a phone call seeking comment, while Kipnis' attorney said his client was disappointed and disagreed with the indictment. "We will enter a plea of not guilty and expect to be vindicated," Michael Swartz said.

Black had no comment, spokesman Jeff McAndrews said. Hollinger Inc. was satisfied with the indictment.

"We're pleased that the U.S. attorney has made significant progress in its investigations," spokesman Larry Parnell said. "Hollinger Inc. will continue to cooperate in these and other related investigations."

Hollinger Inc. is the Toronto-based holding company that has voting control over Hollinger International. Ravelston - the privately held Canadian company that Black and Radler used to control and which went into receivership after they resigned this April - is the majority owner of Hollinger Inc.

Federal prosecutors said in March they were conducting a fraud investigation into Hollinger Inc., Black and Radler.

According to the indictment, noncompete fees were paid by companies that bought newspapers from Hollinger International so Hollinger International wouldn't later operate a rival newspaper.

The money should have gone to Hollinger International, but prosecutors allege that Ravelston, Radler and others took millions of dollars in noncompete fees for themselves and didn't disclose those deals to Hollinger International's audit committee.

Prosecutors allege that Radler supervised the business terms of each of the transactions and Kipnis, 58, of Northbrook, Ill., participated in the documentation and closing of each deal.

In one of six examples outlined by prosecutors, Hollinger International sold American Trucker for $75 million in May 1998. The closing documents for the sale said Hollinger International would sign a noncompete agreement and that $2 million of the sale proceeds would be paid to Hollinger International in exchange for its promise not to compete, according to the indictment. Radler signed the purchase and noncompete agreements on behalf of Hollinger International, prosecutors said.

Prosecutors allege that in January 1999, Ravelston's agents, including Radler, decided that Hollinger International would pay the $2 million to Hollinger Inc., which prosecutors said was "essentially stealing" from Hollinger International's corporate assets.

They allege Kipnis signed the $2 million check Hollinger International issued and sent to Hollinger Inc. around Feb. 1, 1999. The defendants did not disclose the payment to Hollinger International's audit committee, according to the indictment.

Prosecutors also allege that the defendants took bonus payments from Hollinger International and falsely labeled them as noncompete fees to defraud Canadian tax authorities.

Federal prosecutors acknowledged the criminal investigation in court papers in March when it asked to intervene in a U.S. Securities and Exchange Commission lawsuit filed in November against Hollinger Inc., Black and Radler.

The SEC alleged the men engaged in a "fraudulent and deceptive scheme" to take cash and other assets from Hollinger International and conceal the actions from shareholders.

If convicted, Radler and Kipnis face up to five years in prison and a $250,000 fine for each count of the indictment. The court also could impose an alternative fine of twice the gross profit to any defendant or twice the loss to any victim, whichever is greater.

If Ravelston is convicted, it faces a fine of $500,000 for each count or the alternative fine.

Associated Press

More in Tux Machines

Review: Linux Mint 18 (Sarah)

If you were looking to jump the Ubuntu ship completely, then we recommend taking a look at our recent Review of Fedora 24. It’s equally as good as Mint 18 and equally worthy of your consideration. Between Linux Mint 18 and Fedora 24, we reckon it’s exciting times in the Linux world. With the exception and onset of the boring world of vanilla Ubuntu releases, Linux feels reinvigorated and fresh once again. Jump on board, because it can only get better from here. Read more

Security Leftovers

GNU News

Leftovers: OSS

  • Mozilla Firefox 47.0.1 Is Now Available in the Arch Linux and Solus Repos
    Mozilla quietly delivered the first point release of the Mozilla Firefox 47.0 web browser to users of Microsoft Windows and Mac OS X operating systems on the day of June 28, 2016. However, because the built-in updater of the Mozilla Firefox web browser doesn't work on GNU/Linux distributions, users have to wait for the latest version of the software to be first pushed by the maintainers of their operating systems on the main repositories before they can upgrade.
  • Questions loom about the future of open source at VA
    The CIO for the Department of Veterans' Affairs sought to reassure stakeholders that the agency was committed to open source in the future, but with Congress pressuring the agency to give up the homegrown health record system VistA, the open source community is a bit perplexed.
  • Watch out for job offers from Google after this open source course
    Over five lakh polytechnic students from 500 colleges across Tamil Nadu would begin training on open source software from Friday, learning more about the nitty-gritties of ‘free’ software under a programme run by the Indian Institute of Technology – Bombay along with the Tamil Nadu government.
  • Bombay Stock Exchange: Open source is a mindset
    Open source is still gaining momentum in the industry worldwide. Despite naysayers, open-source software and hardware are making believers out of a broad array of users. In the case of Bombay Stock Exchange, LTD (BSE), the transition has been cost efficient, as well as has improved order processing power. By switching from proprietary hardware to open source, Kersi Tavadia, CIO of BSE, reported going from being able to process 10 million orders a day to 400 million. Even with the increase, the new open-source hardware is only using 10 percent capacity.
  • GitHub releases data on 2.8 million open source repositories through Google BigQuery
    GitHub today announced that it’s releasing activity data for 2.8 million open source code repositories and making it available for people to analyze with the Google BigQuery cloud-based data warehousing tool. The data set is free to explore. (With BigQuery you get to process up to one terabyte each month free of charge.) This new 3TB data set includes information on “more than 145 million unique commits, over 2 billion different file paths and the contents of the latest revision for 163 million files, all of which are searchable with regular expressions,” Arfon Smith, program manager for open source data at GitHub, wrote in a blog post.
  • How one company is using open source to double its customers’ mobile business
    Most retailers today stay a step or two behind when it comes to modern technology, especially on the mobile side. Sawyer Effect, LLC, a consultant for J.Crew Group, Inc., has been using Red Hat, Inc.’s open-source product Ansible, an IT automation engine, to get its customer’s mobile business up to speed and greatly improve its business.
  • Can Capital One change banking with open source, mobile apps, and NoSQL?
    Oron Gill Haus of Capital One came to MongoDB World to present on Hygieia, an open source DevOps dashboard built on MongoDB. Behind that dashboard lies an ambition to change the customer banking experience – no small feat. Prior to his keynote, Haus shared his team’s story with me.
  • How bank Capital One developed an open source DevOps visualisation tool based on MongoDB
    In order to keep up with customers' expectation of a proactive service available 24x7 on many devices, US bank Capital One moved to an agile DevOps structure and a year ago released its own DevOps dashboard. While visualisation tools were available for continuous integration, scanning and testing, Capital One's development team was unable to find one that provided a complete overview of the whole production process. The dashboard they developed, called Hygieia, was open sourced to encourage rapid development. It is currently in version 2.0. VP of engineering Gil Haus explained some of the thought processes that went into the creation of Hygieia.
  • What is DC/OS?
    What if we could take the total amount of power in any cloud computing datacentre and provide a means of defining that as one total abstracted compute resource? This notion has given brith to DC/OS, a technology base built on Apache Mesos to abstract a datacentre into a single computer, pooling distributed workloads and (allegedly) simplifying both rollout and operations.
  • What's holding your conference back
  • Airtel Leverages Cloudera Enterprise to Improve Customer Experience and Product Personalization
  • Airtel adopts Cloudera for business intelligence
  • Airtel moves customer data on an open source platform
  • ​RightScale can help you pick out the right public cloud
    For example, let's say you need a local cloud in Australia. With the tool, you'll see that Google can't help you while the others can. Or, for instance say you've tied your business to Oracle and you want Oracle Linux as your operating system. The program will quickly and easily tell you that AWS and Azure are the clouds for you.
  • The Apache Software Foundation Announces Apache® Bahir™ as a Top-Level Project
    Apache Bahir bolsters Big Data processing by serving as a home for existing connectors that initiated under Apache Spark, as well as provide additional extensions/plugins for other related distributed system, storage, and query execution systems.
  • Bahir is the Latest Big Data Project to Advance at Apache
    Recently, we've taken note of the many projects that the Apache Software Foundation has been elevating to Top-Level Status. The organization incubates more than 350 open source projects and initiatives, and has squarely turned its focus to Big Data and developer-focused tools in recent months. As Apache moves Big Data projects to Top-Level Status, they gain valuable community support and more.
  • MongoDB launches Atlas, its new database-as-a-service offering
    MongoDB, the company behind the eponymous open source database, is launching Atlas today, its third major revenue-generating service. Atlas is MongoDB’s database-as-a-service offering that provides users with a managed database service. The service will offer pay-as-you-go pricing and will initially allow users to deploy on Amazon Web Services (AWS), with support for Microsoft Azure and Google Cloud Platform coming later.