An appeals court on Tuesday upheld the fraud convictions of the Canadian impresario Garth H. Drabinsky and his former business partner, Myron I. Gottlieb. The two men, who founded and controlled the now-defunct production company Livent and brought shows like “Ragtime” and a revival of “Showboat” to Broadway, were convicted in 2009 of defrauding investors of about 500 million Canadian dollars ($501.2 million) through a complex system of kickbacks and by routinely altering the company’s financial statements. The Court of Appeal for Ontario, however, reduced the two producers’ prison sentences by two years. Mr. Drabinsky now faces a five-year sentence and Mr. Gottlieb a four-year sentence. Both men had been out on bail until Monday. As is customary in Canada, they were then jailed in advance of the appeals court’s ruling. While they may ask the Supreme Court of Canada for a further appeal, they do not have an automatic right to remain out on bail and will probably begin serving their sentences immediately. There is also no assurance that the Supreme Court will hear their challenge. The trial courts found that Mr. Drabinsky and Mr. Gottlieb had deceived investors by routinely reducing the company’s expenses in financial statements to artificially increase Livent’s profits. It also ruled that the two men had circumvented limits imposed by banks on how much money they could personally withdraw from the company. The appeals court said it lowered the sentences because the trial did not produce “any evidence of the actual financial loss occasioned by the frauds.”
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