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U.S. judge rejects co-defendant's mistrial request

A co-defendant's request to have former media mogul Conrad Black's fraud trial declared a mistrial was swiftly denied.

Judge Amy St. Eve denied the motion by Gus Newman, a lawyer for former Black associate John Boultbee, as well as a request that Boultbee be tried separately from Black.

Newman argued that questions from the lawyer of another co-defendant - Peter Atkinson - would result in testimony prejudicial to his client.

Atkinson's lawyer, Michael Schachter, continued his cross-examination of former Hollinger International finance executive Fred Creasey, attempting to show that Hollinger International's auditors and directors approved "non-compete" payments that went to the former executives.

The payments are central to prosecution allegations that Black, 62, and four other former Hollinger International executives pocketed about $60 million (44.87 million EUR) that should have gone to the company's shareholders.

Schachter suggested non-compete payments related to the sale of Canadian big-city daily newspapers to CanWest Global Communications Corp. in 2000 had been disclosed three times: in a 2001 quarterly report, in a special report related to the deal and in annual reports.

"Not only did the auditors state that all such payments had been approved by an independent audit committee of Hollinger International in 2002 (but) they did it in 2003 as well," Schachter said.

"I have a vague recollection of that, yes," Creasey replied.

Creasey testified last week that Black's use of Hollinger International's corporate jet for a trip to the South Sea island of Bora Bora and other travel cost $7 million a year. He said Black regularly billed the company when he took the jet to visit his estate in West Palm Beach, Florida.

Defense lawyers suggested Creasey sharply inflated the price of the trip and had miscalculated the tax bill, and questioned his recollections about regulatory filings.

The U.S. government claims Black, former Hollinger chief financial officer Boultbee, former top legal executive Mark Kipnis and former vice president Peter Atkinson pocketed the fees from the sale of newspapers in exchange for promises not to compete with the buyers.

While such payments are common in the business world, Black's critics and prosecutors say the money should have gone to Hollinger International and not to Black and his associates.

Former Hollinger International president David Radler, who has agreed to testify against Black, has pleaded guilty in return for a lenient jail sentence of 29 months.