A leading private investigator claimed in court last night that Conrad Black, the former press baron, had hidden €40 million (£27 million) overseas.

According to documents presented to the Chicago court which last month convicted the former Telegraph chairman of looting the newspaper empire he built, much of this money has gone through bank accounts in Gibraltar.

Black, free on $21 million bond, refused to speak to the press as he appeared before the court for a hearing on whether he could return to Canada. He was ordered to remain in the United States pending his sentencing for fraud and obstruction of justice on November 30.

But Edward Greenspan, his Canadian barrister, dismissed as “fabrication and mythology” the claim that he had hidden funds overseas.

The claim was made in court papers by Juval Aviv, the president and chief executive of a New York-based private investigation firm called Interfor, which has been investigating Black’s finances on behalf of Hollinger Inc, the Canadian holding company that he once controlled.

“During the course of my investigation, I have been informed by several reliable, independent [from each other] sources that Conrad Black has been moving significant amounts of monies around the world from 2005 to the present,” Mr Aviv wrote in a sworn affidavit filed with the court and obtained by The Times.

“In particular, much of this money has either gone through or is currently domiciled in Gibraltar.” He added: “The estimates I have received regarding the amount of money vary widely, but several sources have all told me the same amount, namely approximately €40 million in Gibraltar.”

“These funds have gone through financial institutions in Luxembourg, the Caribbean, the UK and Channel Islands from 2005 to present.” He said that some of the money appeared to have originated in a National Westminster Bank account in Jersey and two accounts in Barbados. “I have determined that Conrad Black has continued to transfer millions of dollars between his accounts outside North America since September 29, 2006.”

Mr Aviv describes himself in a company brochure as a retired Israeli major who led an elite commando/intelligence unit and then served the Israeli spy agency Mossad in operations in “many countries” in the 1960s and 1970s. He served as a lead investigator for Pan Am in the bombing of Flight 103 over Lockerbie.

In response to the allegations, Mr Greenspan said that Black had two accounts in Jersey to fund his London house and neither contained more than $20,000.

Judge Amy St Eve, who presided over the 15-week trial, appeared sceptical about the claim, and said that she would not rely on the information in making her decision on bail. But she ordered Black to remain in the US, continuing his confinement to the court districts around Chicago and his oceanfront mansion in Palm Beach, Florida. Her decision came after a submission by prosecutors that Black could fight extradition back to the US if allowed to return to Canada.

Judge St Eve had originally shown interest in allowing Black to return to Canada if he waived his right to fight extradition and surrendered his passport at the border so he could not flee to a third country. But Thomas Beveridge, of the Canadian Department of Justice, said in a court filing that Black could still battle extradition even if he promised her he would not do so. “Lack of express statutory authority to enforce these prior undertakings gives rise to the possibility of extensive litigation in our courts,” Mr Beveridge said in his four-page note.

Black has hired a top-flight US lawyer to handle his appeal. Andrew Frey, who has argued 60 cases before the Supreme Court, was recommended in part because he was part of the legal team that successfully fought the conviction of Frank Quattrone, a former Credit Suisse First Boston technology specialist.

The descent

— Black turns a 1969 investment of a few hundred dollars in two Canadian newspapers into the world’s third-largest English- language newspaper empire

— Resigns as head of Hollinger in November 2004, after institutional investors raise questions about transactions. In August 2005 a federal grand jury in Chicago indicts Black and three former associates on fraud and other charges, alleging that they stole millions from Hollinger by keeping payments that should have gone to Hollinger investors

— Black’s partner David Radler makes an agreement with prosecutors, pleading guilty in September 2005 to fraud in exchange for a 29-month sentence

— After a 15-week trial Black and his three co-defendants were all found guilty on July 13 of three counts of mail fraud. Black also found guilty of obstructing justice

Source: Reuters

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