CHICAGO — Prosecutors rested their racketeering and fraud case against media mogul Conrad Black on Wednesday, minutes after announcing they were dropping one money laundering count against him.

Prosecutors did not say why they dropped the count, but evidently believed the evidence presented by the government over more than 10 weeks of trial thus far might not support a conviction.

Federal spokesman Randall Samborn said he would have no comment on the decision, which came with no fanfare while jurors were out of the courtroom and a number of issues were being discussed by the judge and attorneys.

"At this time the prosecution rests,'' Assistant U.S. Attorney Eric Sussman told U.S. District Judge Amy St. Eve, ending the government's case against Black.

Attorneys for the beleaguered former press lord and three co-defendants were scheduled to begin calling witnesses Thursday in what is expected to be a much less time-consuming case for the defence.

Black, 62, and three other former executives of Hollinger International are charged with swindling the newspaper holding company out of millions of dollars through the sale of Hollinger assets.

The alleged scheme began with a decision in the late 1990s by Black, who was the company's chairman, to sell hundreds of small Hollinger-owned community newspapers across the United States and Canada.

Millions of dollars were paid to Hollinger in exchange for promises that it wouldn't go into competition with the new owners of the papers.

Prosecutors say Black and two of his co-defendants, former Hollinger vice presidents John Boultbee and Peter Atkinson, illegally diverted much of the money to themselves with help from corporate counsel Mark Kipnis. Kipnis also is on trial.

All four of the defendants maintain that they did nothing illegal.

The prosecution rested its case amid bickering over 13 boxes Black removed from the company's headquarters in Toronto late in the afternoon of May 20, 2005, in defiance of a court order.

Jurors on Wednesday saw pictures captured by security cameras of the former Hollinger CEO hauling the boxes out of the headquarters building and loading them into a waiting limousine that promptly whisked them away.

Black, who is charged with obstruction of justice in the incident, was forced to return the boxes, which sat on an evidence cart next to the jury box while the jurors viewed the security camera photos on a large screen.

After jurors had gone home Wednesday, Black defence attorney Marc Martin argued that the obstruction count should be thrown out along with the money-laundering count because there was no proof of wrongdoing.

"We don't know what Mr. Black's intention was," Martin said.

He said no harm was done because Black eventually returned the boxes intact.

But Sussman argued that the obstruction of justice was blatant and that Black had defied not only a Canadian court order but an American court and a federal grand jury before finally returning the boxes.

"We will probably never know what Mr. Black took -- we do know what Mr. Black returned," Sussman told St. Eve.

St. Eve gave both sides until June 5 to file briefs expanding on their arguments. Martin said he would ask her to drop other counts, as well.

Earlier, while jurors were still eating lunch, debate among the attorneys returned to the recurring theme of how much of Black's flamboyant rhetoric and obvious zest for the finer things in life should be allowed into evidence.

St. Eve barred Sussman from reading to jurors one sentence from a memo that Black wrote when he was criticized by shareholders for using the Hollinger corporate jet for a vacation on Bora Bora in French Polynesia.

She did allow Sussman to read this portion to jurors: "We have to find a balance between an unfair taxation on the company and a reasonable treatment of the founder-builder-managers. We are proprietors, after all, beleaguered though we may be."

But she said this portion would pose too much danger of prejudicing the jury: "I'm not prepared to re-enact the French revolutionary renunciation of the rights of the nobility."