The case in brief:

For more than 30 years, Black controlled the publishing conglomerate Hollinger International, which owned among other newspapers the Chicago Sun-Times and the UK’s Daily Telegraph. At its peak in 1999, Hollinger’s revenues were $2.1 billion.

In the late 1990s, Black advised Hollinger to start selling its smaller newspapers before the Internet began to crush their profits. It was lucrative for Black and three other Hollinger execs who structured the newspaper deals so that they personally received millions of dollars in noncompete fees from the buyers. Hollinger’s board knew nothing of these noncompetition agreements.

In 2007 an Illinois jury convicted Black on three counts of fraud (amounting to more than $6 million) and one count of obstruction of justice.

Black’s appeal asks the court to consider a fundamental question: If an executive’s dishonest actions cause no discernible economic harm to a company or its shareholders, is it still considered criminal fraud?

Why it matters:

Black’s will be a test case to rule whether the “honest services” clause is so broad that it should be invalidated.

Critics of the statute say it is so vague that it has become a relatively easy way for prosecutors to go after those in government and business who participate in activities that are, as one court put it “something close to bribery,” but not actual bribery.

“First, its unintelligible language fails to give ordinary citizens fair notice of what is prohibited,” argues the Chamber of Commerce in a friend-of-the-court brief. “Second, the statute’s capacious language invites arbitrary and unpredictable enforcement. As real-life examples show, the statute is a catch-all that can be used to target almost any imaginable form of dishonesty in government or business.”

If the court decides the language is too vague, it could invalidate parts of the convictions of Black, Skilling, Madoff, and any number of other corporate fraud cases, says Thomas Goldstein, a partner at Akin Gump Strauss Hauer & Feld. “Congress would surely move to amend the law to make it more detailed and clear,” he adds.

A more likely outcome, legal scholars say, is that the court will attempt to define what it means to deprive someone of “honest services,” which could send Black back to a lower court for a new trial in light of the new definition. It could also result in further confusion as judges attempt to interpret the clarified law.

The court is also hearing two other cases this term, including one brought by Skilling, that challenge different applications of the honest services clause — an indication that it is considering narrowing the definition of what exactly qualifies as criminal fraud.

The infamous Conrad Black office (where he walked out a slew of banker boxes of documents) was across the street from a party I was at this weekend. The exact topic of this article came through my mind while walking down the sidewalk – who really defines fraud? (I am not suggesting that what he did was above board, but just a thought that past through my mind at the time)