Ontario's highest court upheld Tuesday the fraud convictions of Broadway theater impresarios Garth Drabinsky and Myron Gottlieb but reduced their prison terms.
Drabinsky and Gottlieb were both convicted in 2009 on two counts of fraud and one count of forgery. The two co-founded The Live Entertainment Corporation of Canada, Inc., or Livent, that produced such 1990s hits as "Ragtime" and "Show Boat."
The two reported to jail Monday night ahead of the appeals court decision, after being free on bail since their arrests in 2002.
Judge Mary Lou Benotto found both men manipulated Livent's statements over nine years to attract investors, before the company went bankrupt in 1998. The Tony award-winning producers claimed their accounting staff perpetrated the fraud without their knowledge.
The Ontario Court of Appeal rejected the appeal but trimmed two years of each of the men's sentences.
Drabinsky must now serve five years, and Gottlieb four.
"We agree with the trial judge that substantial penitentiary terms were required for both appellants," the judges wrote in their decision, but said Benotto failed to take into account that there was no evidence introduced at the trial about the amount of money that was actually lost because of the fraud.
Drabinsky's lawyer, Edward Greenspan, said he would only know in couple of days whether his clients planned to appeal to Canada's Supreme Court. Bail is not automatically granted when an appeal to the Supreme Court is sought.
Currently, Greenspan said Drabinsky will be eligible for early release after 14 months.
The Toronto-based company filed for bankruptcy protection after the fraud was revealed by a new management team headed by former Walt Disney Co. President Michael Ovitz, who had invested in Livent.
Livent was once the largest live theater company in North America. It once owned or controlled theaters in New York, Chicago, Toronto and Vancouver and its Broadway productions have won 14 Tony Awards and have been nominated for dozens more.
Drabinsky and Gottlieb were indicted in the U.S. in 1999 on charges that they had misappropriated millions of dollars from U.S. investors. In 2002, Canadian authorities charged the two, alleging investors and lending institutions were duped into providing more than $500 million Canadian to Livent.
Drabinsky and Gottlieb still face charges in the United States.