Case builds against theater duo

Prosecutors take aim at Drabinsky, Gottlieb

By RICHARD OUZOUNIAN

Canadian prosecutors began their case this week against impresario Garth Drabinsky and his partner Myron Gottlieb on two counts of criminal fraud and one of forgery.

Prosecutors in Ontario Superior Court have already painted a picture of a corporate environment in which duplicity was the norm.

A private contractor named Peter Kofman testified that in the early 1990s, he was asked by Drabinsky and Gottlieb to pay the Live Entertainment Corp. of Canada (commonly known as Livent) for "business development work" to help him solicit new clients, even though nothing came of the arrangement.

In 1997 Livent officials ordered Kofman and another associate to charge what has been claimed to be as much as $1.7 million on their personal credit cards to purchase tickets for the Los Angeles run of the Livent musical "Ragtime."

This was done, the crown attorney claims, not only to paint an exaggerated portrait of the show's success but to increase the amount of fixed assets on the Livent balance sheet.

Gordon Eckstein, former senior veep of finance and administration at Livent, testified that all the company's financial statements concealed expenses and overstated profits. Eckstein, who pleaded guilty to one count of fraud last year, said he kept detailed reports of the actual financial statements in case the true facts ever came to light.