Garth Drabinsky and Myron Gottlieb have each been convicted of two counts of fraud and one count of uttering forged documents.
The verdict was issued in a Toronto courtroom Wednesday morning by Ontario Superior Court Justice Mary Lou Benotto, who presided over the trial of the founders of Livent Inc. without a jury.
It came nearly 11 months after she heard opening submissions in the marathon trial, which wrapped up with final arguments in early January.
Mr. Drabinsky and Mr. Gottlieb were charged in the fall of 2002 after a four-year investigation by the RCMP.
They were accused of orchestrating a scheme to present false financial statements between 1993 and 1998 when the theatre company was publicly traded. They were also alleged to have been behind a false invoice scheme leading up to the initial public offering of Livent in 1993.
The prosecution did not put a specific number on the alleged fraud, but said investors were tricked into investing more than $500-million in Livent when it was publicly traded.
Former Livent executives Robert Topol and Gordon Eckstein were also charged in 2002.
The charges against Mr. Topol were dismissed because of unreasonable delay by the Crown.
Eckstein pleaded guilty to one count of fraud and was sentenced to house arrest. He was also one of seven former Livent employees to testify for the prosecution.
He admitted to overseeing the accounting fraud, yet insisted he was following the orders of Mr. Drabinsky and Mr. Gottlieb.
The testimony of Eckstein was greeted with scorn by defence lawyers Edward and Brian Greenspan.
Eckstein was a “vile” and “foul-mouthed Teflon man” whose evidence should not be accepted, the defence lawyers argued.
In addition to the testimony of the former Livent employees, the prosecution presented numerous company documents that it said showed evidence of false financial statements.
The defence suggested that Mr. Drabinsky and Mr. Gottlieb were unaware of any fraud and they were the victims of a conspiracy.
Judge Benotto was urged by the prosecution to reject this theory during its closing arguments more than two months ago.
“The accused did it. There was no conspiracy. The evidence is what it is,” said Amanda Rubaszek, one of three Crown attorneys prosecuting the case.
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