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CHICAGO (Reuters) - U.S. judges reviewing former media mogul Conrad Black's conviction on Wednesday questioned whether jurors found him guilty of depriving shareholders of his "honest services" or of being a thief.
The distinction is crucial to Black's effort to have his 2007 guilty verdict on three fraud counts and obstruction of justice tossed out based on a Supreme Court ruling that limited the scope of the "honest services" law.
"How is this not theft? What is the theory?" asked Judge Richard Posner of the 7th Circuit Court of Appeals in a blistering question period during oral arguments.
The honest services law has been used by prosecutors in government and corporate fraud cases. But the high court declared it was overused and overbroad.
It sent Black's case back to lower courts to determine if instructions to the jury tainted the verdict.
Based on the possibility that he could face a lesser sentence, Black, 66, was released in July on $2 million bond from a Florida prison.
He had served two years of a 6-1/2-year sentence for swindling shareholders of newspaper holding company Hollinger International Inc. If some convictions are tossed, Black would be resentenced.
Legal experts said Posner's line of questioning may indicate he believes two of Black's three fraud convictions for paying himself for bogus non-compete agreements relied on the honest services law, while the third involving a smaller payment did not.
Posner, one of three judges on the panel, also challenged the government attorney's argument that jurors were given a choice whether to convict Black because he defrauded shareholders or because he violated his fiduciary duty as Hollinger's chief executive.
"You didn't tell the jury, 'if you don't think this is a theft, then don't convict,'" Posner said to the prosecutor.
The panel was especially critical of Black's argument that he was not obstructing justice when he was caught on security cameras removing boxes of documents and other items from his Toronto offices.
"He could have been convicted of obstruction, even without the honest services fraud," Posner said.
Posner said the panel would consider the case, and a ruling could come at any time.
The Canadian-born Black is a British peer who once led the world's third-largest newspaper group with titles including London's Daily Telegraph, Canada's National Post and the Chicago Sun-Times.
The court case is #05-cr-00727.
Editing by Xavier Briand