TORONTO (Reuters) - One-time Broadway impresario Garth Drabinsky was sentenced to seven years in jail on Wednesday and business partner Myron Gottlieb got six for their roles in a half-billion-dollar fraud in the 1990s at their theater production company, Livent, Canadian media reported.
The two were convicted in March of defrauding investors and of forgery at Livent, which was behind Broadway hits such as “Ragtime” and the revival of “Showboat”, before the company collapsed in an accounting scandal in 1998.
Drabinsky, 59, was sentenced to seven years and four years for two counts of fraud, while Gottlieb, 66, was given six years and four years for fraud, according to reports.
The sentences, handed out in a packed Toronto court, are to be served concurrently. Forgery convictions for each man were stayed.
Prosecutors had asked for sentences of eight to 10 years, while lawyers for Drabinsky and Gottlieb had requested two-year conditional sentences, and proposed the pair lecture university students as part of a community service obligation.
In the company’s 1990s heyday, Livent productions such as “Kiss of the Spider Woman” and others were the toast of Broadway, winning more than a dozen Tony awards. Livent also backed the long-running Toronto production of “Phantom of the Opera”.
Canadian prosecutors alleged that the two executives directed company accountants to falsify Livent’s records to boost its earnings. This helped to attract about C$500 million ($470 million) in investments and loans to the company.
The judge said in her March verdict that she was “satisfied beyond a reasonable doubt that Mr. Drabinsky and Mr. Gottlieb initiated the improper accounting system and knew of its continuation throughout the years 1994 to 1998”.
The scheme was discovered in 1998, shortly after U.S. investors, including famed Hollywood agent Michael Ovitz, took control of the firm. A short time later Livent was bankrupt.
Reporting by Cameron French; editing by Peter Galloway