Ex-Broadway producers guilty of fraud
Livent duo tampered with financial statementsTORONTO -- Former Broadway producers Garth Drabinsky and Myron Gottlieb have been found guilty of fraud and forgery following a criminal trial in a Toronto courtroom.
After the verdict Wednesday by Ontario Superior Court Justice Mary Lou Bennotto, Drabinsky and Gottlieb were ordered to return to court April 8 for pre-sentence motions. Drabinsky potentially faces 14 years in prison.
Justice Bennotto, who conducted the 10-month trial without a jury, said in her decision that she was persuaded there had been "systematic and longstanding" manipulation of the books at Livent.
"Mr. Drabinsky and Mr. Gottlieb were so devoted to the continuation of Livent that they directed the falsification of the financial statements in order to continue the flow of money to the company," the judge said in an 85-page written decision.
Drabinsky and Gottlieb were convicted on three fraud and forgery charges that defrauded investors of $500 million between 1993 and 1998. The court found that the Livent duo tampered with financial statements to boost the company's asset value and share price.
As they learned their fate, Drabinsky sat impassively through the short summation of the verdict
During the high-profile trial, crown prosecutors said Drabinsky and Gottlieb cooked the books at Livent before a team led by Michael Ovitz and New York entertainment financier Roy Furman in April 1998 paid $22 million for a controlling stake in the company and installed their own management.
Within six weeks, Ovitz and his team uncovered massive fraud at the live theater producer, leading to the suspension and eventual firing of Drabinsky and Gottlieb.
Lawyers for Drabinsky and Gottlieb unsuccessfully argued that senior Livent executives lied to prosecutors and police investigators in a bid to direct blame for their crimes onto the innocent Livent co-founders.