U.S. court denies Conrad Black bond during appeal (Reuters)

CHICAGO (Reuters) - A federal appeals court denied on Thursday Conrad Blacks request to remain free on bond during the appeal of his convictions for fraud and obstructing justice, though the judges indicated his appeal had at least a chance.

The three-judge panel of the U.S. Court of Appeals for the 7th Circuit extended the bond of two other former Hollinger International Inc executives convicted along with Black in July, but did not tip their hand on which way the court may ultimately rule on the appeal.

The ruling means in all likelihood the flamboyant former press baron and member of Britains House of Lords must surrender on Monday to a Florida prison to begin serving his 6-1/2-year sentence.

"Defendant Black must report to prison on or before March 3, as required by the district courts order," the panel wrote.

In December, U.S. District Judge Amy St. Eve sentenced Black for obstructing justice and defrauding shareholders of Hollinger International, once the worlds third-largest publisher of English-language newspapers where internal auditors once accused Black of operating the chain as a "corporate kleptocracy."

But two other former executives convicted with Black, John Boultbee and Peter Atkinson, were both permitted to remain free on bond during the appeal process. The court said a reversal on some counts where there was a "substantial question" would unfairly penalize them with longer prison terms than they should serve while the appeal is decided.

Atkinson was sentenced by St. Eve to 24 months and Boultbee to 27 months.

Black, however, was found guilty on the additional count of obstructing justice, which carried a more severe 78-month sentence, the court said. His sentence is "substantially longer than the normal course of an appeal," they reasoned.

NO DECISION YET

But the court assured both sides that it did not want to "foreordain the outcome of the appeal."

Until he surrenders, Black has been free on bond but confined to the areas around his Palm Beach, Florida, estate or near Chicago where he was convicted and where Hollinger was once based.

The down-sized company is now called the Sun-Times Media Group Inc and has put itself up for sale.

Prior to the ruling, Blacks lawyer Andrew Frey said he did not anticipate taking the bond issue any further, and would focus on preparing written appeal arguments due March 6. Oral arguments are expected to be in early June before the courts summer recess, with a ruling sometime after that.

Black, who once owned Londons Daily Telegraph and newspapers from the Jerusalem Post to Canadas National Post, relinquished his Canadian citizenship to become a member of Britains House of Lords. If his conviction stands, he is likely to be deported after serving his U.S. sentence.

His former partner David Radler, who pleaded guilty to a single fraud count and testified against Black and three fellow former Hollinger executives, began serving his 29-month sentence February 25 at a Pennsylvania prison. But Radler was expected to seek a transfer to his native Canada, where his prison stay could be shortened.

Black and the others were held responsible for swindling Hollinger out of 6.1 million, and Black was convicted of obstructing justice.

The jury found the executives gave themselves illegal bonuses disguised as untaxed payments for agreeing not to compete with purchasers of Hollingers newspaper properties.

The 12-person jury acquitted Black on nine of 13 charges, though afterward a juror said they had been tempted to convict on all counts but settled on those they felt were air-tight.

In their appeals so far, Black and the other executives argued jointly that there was insufficient evidence that fraud was committed.

As to the obstruction of justice verdict, Black argued the jury had to have speculated on Blacks motives in spiriting 13 boxes out of his Toronto offices. The jury also should not have heard about a Canadian court order barring the removal of documents, the defense argued.

In their appeal to trial Judge St. Eve, the defense challenged the judges "ostrich instruction" to the jury that they could find the defendants guilty if they deliberately ignored evidence of a crime.

In dismissing Blacks initial appeal, St. Eve responded that issue was moot as he and the others were intimately involved in the fraud and lied about it. Prosecutors labeled the appeal a "Herculean" effort doomed to fail.

Black, an accomplished biographer with an ornate writing style, has been quoted as saying prison could offer him time to finish a book about his case. He also may teach at the central Florida federal prison to which he must report.

"The place I have been assigned to is relatively good and if I do go there, they will ask me to teach. I almost always hated teachers, but I guess its an elite occupation in a prison," Black said in an e-mail to www.Independent.ie, operated by Irelands Independent Newspapers.

"We are very confident of winning at least part of the appeal, and of sharply reducing time served. My book about this outrage is almost ready, so if I must go, I will not be going quietly. Its like back to boarding school, without, one dares to assume, the tedium and indignity of corporal punishment."

(Editing by Toni Reinhold)