By Devin Leonard

(FORTUNE Magazine) – NOW THAT A SPECIAL COMMITTEE OF Hollinger International's board has produced an investigative report that reads like a road map for a prosecutor, are indictments on the way for former CEO Conrad Black? The report accuses the Canadian-born press baron and his inner circle on the company's management team of skimming more than $400 million from Hollinger's coffers--or 95% of the company's adjusted net income from 1997 to 2003.

What has received far less attention, however, are the 513-page report's accusations of criminal acts perpetrated by Black and his associates. While the vast majority of the questionable fund transfers at Hollinger were approved by the company's once-docile directors, the report says Black and former Hollinger COO David Radler committed "deliberate acts of fraud and violated civil and criminal statutes" when they secretly took $10 million from the company's $95 million sale of small U.S. newspapers to Newspaper Holdings Inc. According to the report, Black didn't bother to disclose the last-minute cash diversion to his board even though he personally pocketed $4.5 million of the sum. Black and Radler strongly dispute the report's conclusions. In fact, Black has personally filed an $850 million suit that includes defamation charges in Canada against the Hollinger directors who spearheaded the report and their advisor, former Securities and Exchange Commission chairman Richard Breeden.

But surely Black, a member of England's House of Lords, has just begun to fight. The U.S. Attorney's office in northern Illinois is widely reported to be probing Hollinger deals in which the high-living former CEO benefited more than his shareholders. (A spokesman for the U.S. Attorney would neither confirm nor deny the existence of the investigation.) Don't be surprised if prosecutors take a hard look at the 2000 sale of Hollinger's U.S. papers, and go after Black just as they did Adelphia's John Rigas and Tyco's Dennis Kozlowski. No question that's what Hollinger's formerly acquiescent directors had in mind when they issued their incendiary report. -- Devin Leonard