Livent Co-Founders to Appeal Convictions

On March 25th 2009, theater mogulas Garth Drabinsky and Myron Gottlieb were convicted on fraud and forgery charges. Justice Mary Lou Benotto of the Ontario Superior Court of Justice in Toronto said they "systemically manipulated the books" at the now defunct Livent Inc., behind Canadian and Broadway hits like PHANTOM OF THE OPERA.

Drabinsky, who appeared to be in charge, received a sentence of seven years while Gottlieb was sentenced to six years. Now, the two are taking abid to overturn their verdicts by arguing that the trial judge didn't understand critical evidence, according to CBC News.

Gottlieb is asking the Court of Appeal for Ontario for a new trial or a reduced sentence while Drabinsky is seeking an acquittal. If that doesn't work, he is asking for a new trial or a conditional sentence.

Since their conviction, both have managed to stay out of jail thanks to quick paperwork by their lawyers Edward and Brian Greenspan. The day they were sentenced, Drabinsky and Gottlieb were granted bail at $350,000 each pending appeal.

Their argument for appeal holds that that some of their accounting staff furthered the fraud without their knowledge. The two will receive a three-day hearing with the Appeal Court starting Monday.

"She did not properly apprehend the evidence or the significance of it," Edward Greenspan wrote for Drabinsky.

"When the undisputed facts are properly and reasonably assessed without misapprehension, they are completely inconsistent with the conclusion that the Appellant had knowledge of or directed any fraud."

Gottlieb holds that the judge did not separately evaluate the evidence against himself and Drabinsky. While both feel that Crown witness' were lacking credibility.

"The prosecution's reliance on unsavoury, disreputable, self-interested and discredited witnesses had not established the appellant Gottlieb's awareness and participation in the accounting improprieties which took place at the direction and under the supervision of [senior accountant Gordon] Eckstein and with the complicity of the employee witnesses," he writes.

However, the Crown are not buying the pairs arguments.

"The position of the appellants defies common sense and contradicts the lessons of human experience," The Crown wrote. 

While the dollar value of the fraud is not known, investments made in the public company exceeded $500 million..

According to the Canadian Press' article, "Benotto found that Drabinsky and Gottlieb devised a kickback scheme dating back to 1989 that saw assets of Livent and its predecessor company overstated in financial statements. They would arbitrarily move operating expenses from one period to another and apply the expenses of one show to another."

To read the original article, click here.