Conrad Black's Codefendants Found Guilty

Conrad Black's Codefendants Found Guilty

Peter Atkinson is not your typical fraudster. In 2002, when Hollinger shareholders started to complain about the lavish vacations and the multi-million-dollar bonuses, he was the lone voice urging his boss, Conrad BLACK, to sell the private jets and cut down on the executive perks. A year later, when auditors began to investigate the now-infamous non-compete payments, a guilt-ridden Atkinson agreed to co-operate. He confessed to everything, explaining how he and other Hollinger officials pocketed piles of money that rightfully belonged to investors. "He said he had been asked to lie, cover up," said Richard Burt, a member of Hollinger International's audit committee. "He was clearly a kind of broken man." Indeed. By the time Atkinson resigned, he agreed to pay back nearly $3 million.

But there was one thing Atkinson wouldn't do: pull a David Radler. Rather than cut a deal with U.S. authorities, the 60-year-old chose to try his luck in court, hopeful that 12 strangers would look kindly on a man who admitted his mistakes and tried (albeit after the fact) to make things right. The strategy, of course, didn't work. A Chicago jury found Atkinson and two of his former associates - John "Jack" Boultbee and Mark Kipnis - guilty of three counts of mail fraud. All three could spend the next 15 years behind bars.

Not that anyone really noticed. Those TV cameras were camped outside the courthouse to capture the fall of Lord Black, not his three fellow defendants. If not for the photo caption on the bottom of this page, most readers wouldn't even know who's who. And in the end, that anonymity might have been their demise. As hard as they tried, Black's co-accused simply could not convince the jury that their name isn't Conrad.

Like many people who know Peter Atkinson, Blair Mackenzie was stunned by the guilty verdict. "I was sick to my stomach," says the former Southam lawyer, who worked with Atkinson for almost two decades. "I regarded him as a man of principle, and never had the slightest reason to question his integrity." Few did. Hollinger's former executive vice-president remains a highly respected figure in Canada's legal and business circles. Generous, soft-spoken and decent to a fault, his resumé includes stints as a director on the boards of Canadian Tire and Toronto Hydro Corporation. Allan Rock, the former federal justice minister and one-time Canadian ambassador to the United Nations, was among the many character witnesses willing to testify on Atkinson's behalf. "He is a person that I would certainly trust, absolutely," says Stuart Robertson, another media lawyer who worked with Atkinson. "I don't believe he's a dishonourable person or a criminal. I just don't believe that."

Mark Kipnis's conviction was equally astonishing - if not more. Once the top in-house lawyer at Hollinger International, he was dubbed "The Pen" by prosecutors because he signed all the damning documents. But unlike the others, the 59-year-old never received a penny of the non-compete payments, and at one point Judge Amy St. Eve considered dropping all the charges against him. In private, jurors called him "Saint Mark."

Yet Kipnis still went down for his relatively minor role in the scam. "Every one of us who knows Mark are not only saddened by this situation, but also surprised," says Michael A. Reiter, a Chicago lawyer who worked with him until the late 1990s. "He is not somebody that any of us would have thought would be dishonest or unethical. He just isn't that kind of guy." Even prosecutors feel a bit bad about the whole thing. More than once, they offered him a deal in exchange for his testimony, but Kipnis refused - well aware that a plea bargain would mean the end of his legal career. That seems inevitable now.

Prosecutors have much less sympathy for John Boultbee, Black's long-time tax man. Though not as outspoken as his former boss, Boultbee, 62, is equally convinced of his innocence. When internal investigators first uncovered misspending, he refused to tender his resignation; when he was later fired, he sued for wrongful dismissal. "If you're not being audited by Revenue Canada, you're being too compliant," Boultbee famously told one Hollinger investor. These days, he is much more careful with his money. During the trial, he reportedly chose a $95-a-night "efficiency apartment" instead of a four-star suite. On Nov. 30 - sentencing day - he'll find out if prison is next.

Maclean's July 30, 2007