Founders of Broadway producer Livent lose appeal

Tue Sep 13, 2011 2:03pm EDT
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TORONTO (Reuters) - An Ontario court has upheld fraud convictions against the two Canadian theater impresarios behind the 1990s Broadway hits "Show Boat" and "Ragtime", but has reduced their prison sentences.

In a decision released Tuesday morning, Ontario Court of Appeal rejected a request for a new trial by Garth Drabinsky and Myron Gottlieb, founders of now defunct theater production company Livent Inc.

But the court reduced Drabinsky's sentence to five years from seven and Gottlieb's to four years from six.

A spokeswoman from Ontario's Ministry of the Attorney General said both men were already in custody as they were required to turn themselves in on Monday night, ahead of the judgment.

In March 2009, they were convicted of fraud and forgery. The forgery conviction was later stayed.

In reducing their sentences, the appeals court said the lower court should have taken into account the fact that there was no evidence of actual financial losses caused by the fraud.

Prosecutors argued the pair had directed accountants to falsify Livent's records and to artificially boost earnings to attract investment.

The lower court found that Drabinsky and Gottlieb had also devised a scheme to book false invoices, inflating the company's assets.

On appeal, defense lawyers Edward Greenspan and Brian Greenspan argued that former employees who testified against Drabinsky and Gottlieb were unreliable, and that government lawyers had not proven the pair knew about the fraud.   Continued...

<p>Livent co-founder Myron Gottlieb (L) arrives at the courtroom as a camera man falls to the ground before a sentencing hearing with his Livent Inc. co-founder Garth Drabinsky (not seen) in Toronto, August 5, 2009. REUTERS/Mark Blinch</p>