What investors didn’t see was an internal Ponzi scheme that inflated profits while revenue was shifted under the radar from one show to finance another. It all came tumbling down in 1998, when Michael Ovitz, the former president of the Walt Disney Company, bought a 12 per cent stake and installed a new management team. A forensic audit unearthed widespread accounting irregularities. In November, Drabinsky and Gottlieb were out.
The two were indicted the following January by the U.S. attorney’s office in Manhattan on 16 counts of fraud and conspiracy, charges they have, to date, willfully ignored. Later that year, the Ontario Securities Commission charged a group of former Livent executives, including Drabinsky and Gottlieb, with securities violations, a matter still to be resolved.
The resilient Drabinsky forged on, opening the Drabinsky Gallery in Toronto in 1999 for contemporary Canadian artists. He also spearheaded marketing projects for the National Post and the Toronto Argonauts. After criminal charges were laid in 2002, he continued to hatch new projects such as “Pamela Wallin Cultural Weekends” in Muskoka. He teamed up with Gottlieb again at a venture called The Visual Bible, a former uranium company that, in a transformation that will seem odd only to those unfamiliar with NASDAQ-traded stocks, had morphed into a Christian-themed movie company. Their first production, The Gospel of St John, was released in 2003 to critical acclaim but disappointing DVD sales. In 2005, amid the flutter of litigation, the company filed for bankruptcy.
By then Drabinsky had remarried former paralegal Elizabeth Winford and was on to his next project, the reality show, Triple Sensation, a Canadian version of American Idol that’s more multi-disciplinary and less mean. It debuted on the CBC last year with Drabinsky as the executive producer and a judge. The second season is in the can and set to air in June.
Drabinsky’s future is less certain. The two Livent founders each face a potential 38 years in jail; the Crown is expected to ask for at least an eight-year sentence for each. But a sluggish appeal process, which will inevitably be set in motion, could delay any incarceration for years.
“I am the impresario of my own destiny,” Drabinsky wrote hubristically in Closer to the Sun. At the time, he was the toast of Broadway and freshly honoured with an Order of Canada. Today, as he sat in the harsh theatre of a Toronto courtroom, those words took on a prescient, ominous new meaning.
Update (April 16): Drabinsky and Gottlieb’s three-day sentencing hearing has been deferred until June 3.
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