Black Spent $4m Making New York Flat 'habitable'

Conrad Black renovated a New York apartment with $4.6m (£2.31m) of fittings, including an antique Chinese carpet, a Napoleonic shaving basin and an Indian marble sculpture - simply in order to bring it up to a "habitable" condition, a jury heard today.

Fighting charges of fraud and racketeering, Lord Black's lawyers called an accountant, Lee Williams, as an expert witness to testify that all of the former Telegraph owner's expenditure was legitimate.

But the tactic rapidly backfired as prosecutors gleefully cross-examined Mr Williams over the finer details of Lord Black's furniture at a 4,500-sq ft Park Avenue pad, which he used rent-free between 1994 and 2000.

In a boardroom memo, directors of Lord Black's Hollinger media empire had agreed to foot the bill for capital expenditure, furnishings and decoration to put the residence in an "appropriate habitable condition for the use contemplated by executives and the company", citing the need to entertain business guests.

Prosecutors suggested that the former Telegraph owner applied a liberal interpretation. Invoices shown to the jury included a bill for a 1920s Chinese carpet costing $33,000, a Persian mother of pearl box for $9,600 and a French terracotta vase at $3,750.

A pair of Louis XVI-style painted stools amounted to $9,000 and a diamond vault cost $9,800. An Indian relief depicting some elephants was priced at $17,710 and an art deco Wedgwood urn cost $2,295.

Some of the fittings befuddled Mr Williams. An invoice for $12,500 was for a cabinet containing a shaving basin described as a "mahogany barbiere with porcelain bottle that belonged to Napoleon during the campaign of Russia".

Prosecutor Eric Sussman asked: "Was that part of the decoration or the furnishing to put the apartment in a habitable condition?" Mr Williams replied that he did not know what a barbiere was.

Moving onto a $4,300 electric towel warmer, Mr Sussman asked: "Did that come under capital improvement, decoration or furniture to put the apartment in a habitable condition?"

Mr Williams replied: "I'm not an expert in interior design but I would probably classify that as decorating."

Hollinger bought the apartment in 1994 for $3m and Lord Black bought it from the company in 2000 for the same price. The prosecution suggests this was a sweetheart deal allowing Lord Black to pay far below the market price - a property valuer called by the US government testified that it was worth $8.5m.

Lord Black maintains that his purchase price was low because it amounted to reimbursement by Hollinger for his expenditure in making the place "habitable".

In an unexpected move, the defence shelved plans to call the billionaire property tycoon, Donald Trump, as a witness. The courtroom was packed today in anticipation of Mr Trump's appearance but Lord Black's lawyer, Edward Greenspan, told reporters: "We're not calling Mr Trump." He offered no explanation for the decision.

On trial alongside Lord Black are three former colleagues - Jack Boultbee, Peter Atkinson and Mark Kipnis.

The jury is likely to be sent out to consider a verdict by the end of the month.

The trial continues.