Drabinsky, Gottlieb fraud convictions upheld, but court trims jail time

Disgraced impresarios Garth Drabinsky and Myron Gottlieb, whose company Livent Inc. was once the toast of the Canadian theatre scene, remain guilty of fraud but will serve shorter prison terms, Ontario’s highest court has ruled.

TORONTO — Disgraced impresarios Garth Drabinsky and Myron Gottlieb, whose company Livent Inc. was once the toast of the Canadian theatre scene, remain guilty of fraud but will serve shorter prison terms, Ontario’s highest court has ruled.

The Ontario Court of Appeal upheld the fraud convictions handed down by a lower court in 2009, but trimmed their jail time by two years each — Drabinsky must now serve five years behind bars, and Gottlieb four years.

The two were convicted after Ontario court Judge Mary Lou Benotto found that during a nine-year span they manipulated the income reported by Livent, once the driving force behind Canadian and Broadway theatre hits like “The Phantom of the Opera” and “Showboat.”

At the time of their trial, Benotto imposed a sentence that took into account the magnitude of the company’s collapse — it was estimated at the time that investors lost some $500 million when the company went bankrupt in 1998.

However, since it was never clear to what extent the fraud was to blame for the company’s collapse, the Appeals Court said the losses don’t provide an accurate means of assessing the fraud’s impact or an appropriate punishment for its perpetrators.

“It was wrong to attribute the ultimate failure of Livent to the fraud,” the three-judge panel wrote in its ruling.

“The causes of Livent’s demise were admittedly numerous and complex. The bankruptcy no doubt caused significant losses to creditors, employees and investors. Those losses cannot, in our view, be laid entirely at the feet of Drabinsky and Gottlieb.”

The two men appealed both their convictions and their sentences, arguing the fraud was executed by other Livent employees without their knowledge.

Lawyers Edward and Brian Greenspan also argued the judge used faulty logic in assuming the defendants were in the know regarding financial activity at the company.

But the Appeals Court rejected those arguments, saying Benotto properly evaluated the credibility of key witnesses and reached logical conclusions based on the evidence.

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