Black trial defence slams witness

By Andrew Stern

CHICAGO (Reuters) - Some of the payments at the centre of Conrad Black's criminal fraud trial were reported to U.S. government regulators in a timely fashion and not hidden as prosecutors have suggested, jurors were told on Thursday.

Under cross examination, Fred Creasey, a former comptroller at Black's Canadian holding company Hollinger Inc., was shown a document bearing his name by Defence lawyer Patrick Tuite.

Creasey had testified on Wednesday that some of the money paid to Black and his associates from newspaper property sales in 2000 did not show up in regulatory filings that Hollinger's U.S. subsidiary, Chicago-based Hollinger International, had made until May 2001.

But the document Creasey was given on Thursday had been filed with the U.S. Securities and Exchange Commission in December 2000, two weeks after a major deal involving the sale of some of Black's newspapers.

Creasey said he could not remember the document. Tuite suggested that Creasey was trying to "mislead the jury", but he was cut off after objections from prosecutors. U.S. Attorney Patrick Fitzgerald's office is running the prosecution.

The courtroom exchange on Thursday, in the early stages of a trial that may go on for months, was an attempt to discredit the prosecution's claims that money flowed to Black and his three co-defendants in a shadowy fashion that skirted routine and legitimate business practices.

While focusing on business practices and who knew about what, prosecutors have yet to start trying to prove their allegations that the payments Black and the others received were illegal. The defendants claim they were not.

Prosecutors contend that Black and the three co-defendants diverted about $60 million (30 million pounds) from Hollinger International by sending payments from non-compete agreements to entities more closely controlled by Black such as Hollinger Inc.