TORONTO — The courts have a duty to strongly denounce corporate fraud, an Ontario judge said Wednesday in sentencing to prison a pair of theatre heavyweights who systematically cooked their company Livent’s books for years, defrauding investors of millions.
Garth Drabinsky was sentenced to seven years in prison and his business partner Myron Gottlieb was sentenced to six years.
The two theatre moguls cooked the books of their Livent company over nine years until the firm went bankrupt in late 1998.
Ontario Superior Court Justice Mary Lou Benotto said the contributions Drabinsky and Gottlieb made to society must be taken into account.
“But no one is above the law,” she said. “No one gets to write his own rules.”
The pair presided over a company “whose corporate culture was one of dishonesty,” which Benotto said the court has a duty to strongly denounce.
“Corporate fraud such as this results in tangible losses to employees, creditors and investors,” Benotto said in her decision.
“It also results in less tangible, but equally significant loss to society. It fosters cynicism. It erodes public confidence in financial markets.”
The duo was convicted of two counts each of fraud and one count of forgery, but Benotto stayed the forgery convictions Wednesday, saying the facts were the same as one of the fraud counts.
Drabinsky was sentenced to four years on one fraud charge and seven years on the second, to be served concurrently. Gottlieb was handed four years on the first count of fraud, and six years on the second, also to be served concurrently.
Gottlieb was primarily responsible for Livent’s finances, but Benotto said Drabinsky was “the main person in charge,” and that Gottlieb was “caught in a wide net that was most likely meant for Mr. Drabinsky.”
Livent was behind such Canadian and Broadway theatre hits as “The Phantom of the Opera.”