In a radical escalation of its war against founder Conrad Black, Hollinger International Inc. has increased its court claim against him and other executives of the newspaper group to $1.25 billion US and accused them of corruption.

Black fired back that the company's latest action "is tabloid journalism masquerading as law."

The operating company of Black's newspaper empire said Friday evening that it has amended its complaint in a Chicago court and now is seeking $484.5 million US -- $380.6 million in damages and $103.9 million in prejudgment interest.

The company is also asserting that the defendants "engaged in a pattern of racketeering activities" and is demanding that the damages be tripled, as provided for in the U.S. Racketeer Influenced and Corrupt Organizations Act.

The RICO claim is based on "alleged fraudulent diversion of company funds through improperly obtained non-competition and other payments of fees, transfers of certain newspaper assets at less than fair value, and other acts."

The total claim including treble damages comes to $1.25 billion, plus legal fees.

A statement issued Friday night through Ravelston Corp., a Black private company through which he controls Hollinger International via Toronto holding company Hollinger Inc., commented that "overreaching use of the Racketeer Influenced and Corrupt Organizations Act has been frowned upon in virtually every circuit court in the United States. When this complaint is heard in a court of law, the poverty of this case will be plainly demonstrated."

Hollinger International alleged previously that Black and his associates took money improperly from the company -- whose holdings include the Telegraph of London, the Chicago Sun-Times and the Jerusalem Post -- through excessive management fees and unjustified non-competition payments.

The amended filing adds accusations of breaches of fiduciary duty "in connection with the sale of certain newspaper assets at less than fair value to companies controlled by certain of the defendants."

There have been persistent reports that Black and longtime associate David Radler arranged to buy small-town papers from Hollinger International at below market value.

The new filing also seeks to recover bonuses previously paid in connection with subsidiary Hollinger Digital.

The Ravelston response insisted that "the vast majority of the agreements and transactions to which Hollinger International is apparently objecting were reviewed and approved by its independent directors."

Black, who was forced to resign as Hollinger International's chief executive officer in November and as chairman in January, is engaged in a complex web of litigation with the operating company, whose previous claim in January was for $200 million US.

He in turn filed an Ontario action in February demanding $850 million in damages from Hollinger International directors, including $200 million for defamation, and last month sued Hollinger International for refusing to exercise his stock options.

The situation has snowballed since November, when a Hollinger International board committee uncovered $32.2 million US in alleged unauthorized or unreported payments to Black and three other executives.

In a development earlier Friday, the Toronto Stock Exchange said it is reviewing the status of the Hollinger Canadian Newspapers Limited Partnership -- the remnant of Hollinger's Canadian holdings which briefly made Black the country's dominant newspaper proprietor.

The partnership, whose unitholders receive income from 13 small-market dailies and assorted trade publications and community papers, has not complied with a TSX requirement that listed companies have at least two independent directors. The partnership has been given 30 days to meet that rule.

The big-city Canadian newspapers Hollinger had owned, including the former Southam dailies and the National Post, were sold to CanWest Global Communications for $3.2 billion in 2000. Hollinger's dailies in smaller markets in Ontario were sold to Osprey Media Media Group for $220 million in 2001.

Beset by financial and legal troubles, Black arranged to sell his controlling interest in Hollinger Inc. to British tycoons David and Frederick Barclay in a $605-million deal which fell apart in March.

Hollinger International is now entertaining bids for some or all of its assets.