B3

Romina Maurino
THE CANADIAN PRESS

Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

Speak Up

TORONTO - The testimony of perjurers and accomplices amounts to "glaring omissions" that fail to prove the two theatre impresarios behind such hits as Phantom of the Opera are guilty of bilking investors and banks out of millions, court heard Thursday as arguments at the Livent trial drew to a close.

After months of often complex testimony and evidence revolving around accounting practices, the fate of Livent co-founders Garth Drabinsky and Myron Gottlieb was put into the hands of Ontario Superior Court Judge Mary Lou Benotto, who ordered both sides back to court Feb. 2 to set a verdict date.

The duo face a maximum of 14 years in prison if convicted.

The prosecution alleges Drabinsky, 59, and Gottlieb, 65, fraudulently misstated Livent's value and cheated banks and investors out of $500 million.

The defence countered the men were the victims of an intricate conspiracy to frame them.

The duo that once produced lavish spectacles such as Ragtime and Showboat and won Tony awards in the process turned to two of the country's most respected criminal lawyers for their defence, brothers Eddie and Brian Greenspan.

During closing arguments Thursday, Eddie Greenspan said he was "astounded" that Crown prosecutors never called an expert to testify.

Instead, the prosecution relied on "perjurers" and "admitted accomplices-" former employees who pleaded guilty to various offences and testified against Drabinsky and Gottlieb, he said.

That, Greenspan argued, is a "glaring omission" that leaves plenty of room for reasonable doubt that Drabinsky, his client, knew nothing about the fraud.

"There's palpable evidence of collusion, improper tainting of the evidence, which must be assessed," Greenspan said.

The Crown also failed to prove a motive for the alleged crime, since there was no real evidence for claims that Drabinsky was burdened with crushing debt, the defence said.

Others at Livent, who were earning good salaries and took pride in being able to go to opening-night shows for big theatre productions, had as much to gain from the scheme, Greenspan argued.

Brian Greenspan, Gottlieb's lawyer, told the judge-alone trial that the evidence "just doesn't support the kind of broad allegations that the Crown makes."

No evidence was presented to show that misstated financials would have been self-evident to Gottlieb, as the prosecution suggests, or that would have led him to detect the fraud, he said.

Prosecutors allege the fraudulent techniques included improperly "rolling forward" expenses into later quarters, shifting costs from one production to another, and creating bogus invoices.

Livent ultimately went bust in 1998 when a new American management team, headed by Hollywood magnate Michael Ovitz, brought in auditors to examine the company's finances and senior executives blew the whistle.

If Drabinsky knew about the fraud, said Eddie Greenspan, he wouldn't have worked to bring new investors in and open the books to auditors, nor would they have brought in eventual whistleblower Maria Messina as chief financial officer.

As a former auditor of Livent, Messina was likely to discover the fraud, he added.

The defence argued that Gordon Eckstein, Livent's former senior vice-president of finance and a key prosecution witness, was the mastermind of the fraud, and acted without his bosses' knowledge.

Eckstein eventually pleaded guilty to one count of fraud but claimed he oversaw the fraud at the direction of Drabinsky and Gottlieb.

Messina pleaded guilty in 1999 to the U.S. criminal charge of making false statements about Livent's finances.

In their closing arguments, prosecutors said a defence theory that Drabinsky and Gottlieb were victims of a conspiracy to frame them was simply absurd.

On Thursday, they dismissed arguments about a lack of outside expert witnesses.

"The Crown doesn't need to call experts; the Crown has called the people who carried out the fraud," prosecutor Robert Hubbard said in his final rebuttal.