Garth Drabinsky, Myron Gottlieb get jail time

Livent producer, business partner were convicted of fraud

TORONTO -- Garth Drabinsky, the former Broadway producer convicted of fraud for cooking the books at a theater company he ran during the 1990s, was sentenced Wednesday to seven years in prison.

Justice Mary Lou Benotto of the Ontario Superior Court of Justice also sentenced Drabinsky's longtime business partner Myron Gottlieb to six years in jail, also for fraud.

The former Broadway impresarios each was found guilty in March on three counts of fraud and forgery that stemmed from their running of Livent Inc. from 1993-98. The third court of forgery was stayed by the court.

Canadian law allows first-time nonviolent offenders like Drabinsky and Gottlieb to serve only one-sixth of their jail sentence before they are fast-tracked to parole.

The men were briefly taken into custody after their sentencing to allow bond to be posted before their release. Edward Greenspan, Drabinsky's defense lawyer, offered no comment on whether his client will appeal; it's expected that Drabinsky and Gottlieb will appeal, which should take up to two years before either man faces jail time.

In her sentencing, Justice Benotto said Drabinsky and Gottlieb "presided over a corporation whose corporate culture was one of dishonesty."

"Those in business must know and the community must know that this will be the court's response to corporate fraud," she added.

Drabinsky and Gottlieb, who sat passively during their sentencing, earlier were found guilty of sham invoicing, reducing expenses by shifting costs from one financial quarter to another or from one losing theatrical production to a future show, and inflating ticket sales for theatrical runs.

The manipulations boosted Livent's share price and propelled Drabinsky and Gottlieb to top status as Broadway theater producers.

In 1998, as Livent's finances became a house of cards, Drabinsky and Gottlieb sold a controlling stake in the company to former super-agent Michael Ovitz, and soon after their accounting irregularities came to light. Livent was eventually forced to file for bankruptcy and sell off its assets.

The Crown had suggested Drabinsky and Gottlieb spend 8-10 years in jail.