Livent duo convicted of fraud
Broadway producers face 14 years in prison for cooking theater booksFormer Broadway producers Garth Drabinsky and Myron Gottlieb were found guilty of fraud and forgery Wednesday for what was deemed a "systematic and long-standing" manipulation of the books at live-theater producer Livent.
The pair was ordered to return to court April 8 for presentence motions. They potentially face 14 years in prison.
Ontario Superior Court Justice Mary Lou Benotto, who read the verdict, conducted the 10-month trial without a jury.
"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," she said in an 85-page written decision.
Drabinsky and Gottlieb were convicted on three fraud and forgery charges for defrauding investors of $500 million from 1993-98. The court found they tampered with financial statements to boost the company's asset value and share price.
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 paid $22 million for a controlling stake in the company in April 1998 and installed their own management.
Within six weeks, the team uncovered massive fraud, leading to the suspension and eventual firing of Drabinsky and Gottlieb.
Lawyers for the pair argued that senior Livent executives lied to prosecutors and police investigators in a bid to direct blame for their crimes onto the company's co-founders. (partialdiff)