However, the court reduced their prison sentences by two years. The judges' statement reads: "The appellants raise a number of arguments which, in large measure, challenge the findings of fact made by the trial judge. We see no reversible error and would dismiss the conviction appeals."
The former leaders of the now-defunct theatrical production company Livent, Inc., were convicted of fraud and forgery in 2009 and were sentenced on Aug. 5, 2009, to seven and six years in prison, respectively, for their crimes. While they appealed, they had been free on bail since 2009, which is common for white-collar cases.
Ontario Superior Court of Justice Mary Lou Benotto handed down the 2009 sentence. At the time, Drabinsky got seven years in jail for fraud, to be served concurrent with a four-year sentence for a forgery conviction. Gottlieb received six years for the fraud concurrent with four years for the forgery.
Justice Benotto did not give the men longer sentences because of health issues resulting from Drabinsky's childhood polio and the fact that Gottlieb had suffered personal losses and has been unable to work for the past ten years.
The prosecution had sought eight to ten years in prison for the men, whose publicly traded production company created Tony-winning or -nominated Broadway shows including Ragtime, Kiss of the Spider Woman, Fosse, Parade, Barrymore, Show Boat and more. They were convicted of falsifying accounting statements over the decade-long (1989-98) life of Livent, as they raised $500 million in Canada and the U.S. to support their North American theatre-owning and producing empire. Accounting irregularities at Livent were investigated in the late 1990s, when the company was reaching artistic fruition with the new musical Ragtime, which opened Livent's new Ford Center for the Performing Arts on Broadway (the venue, now called Foxwoods Theater, is a merging of two vintage Broadway theatres). Ragtime would end up winning 1998 Tony Awards for Best Book of a Musical and Best Score, among others. (Fosse, which won a 1999 Tony as Best Musical, was then in the works.) By late 1998, the decade-old company declared bankruptcy and collapsed, and the stock was worthless. Bloomberg reported that the company's peak value was $269 million in 1996.
Drabinsky and Gottlieb are still wanted men in the U.S. In 1999 they were charged with fraud by the U.S. Attorney's Office in the Southern District of New York.
Drabinsky and Gottlieb were arrested by Canadian police in 2002. Their Livent colleagues Robert Topol and Gordon Eckstein were also charged. Topol's charges were stayed by a judge for "unreasonable delay." Eckstein pleaded guilty to one count of fraud, testified against Drabinsky and Gottlieb, and received a two-year "house arrest" sentence that ended in February 2009.
In 1999 Livent's properties were bought by SFX Entertainment, which is now Live Nation.
Drabinsky's Livent, Inc., won Tony Awards for Best Musical (Fosse and Kiss of the Spider Woman) and Best Revival of a Musical (Show Boat), and its productions netted scores of nominations and many wins for artists.
The two men surrendered into custody shortly before the court's Sept. 13 decision was made public. If they decide to appeal to the Supreme Court of Canada, they could be free again on bail.
According to the Toronto Star, the producers' lawyers will review the 69-page ruling before making an appeal decision. As of Sept. 13, the men were in a Toronto detention center.
They are eligible for parole after serving one third of their sentences — Drabinsky after 20 months, and Gottlieb after 16 months.