Canada-TheaterFraud

TORONTO -- — Two founders of a Broadway theater company that produced hit shows such as “Ragtime” and “Show Boat” were convicted Wednesday of accounting fraud for overstating their business’ finances by millions of dollars for years.

Garth Drabinsky and Myron Gottlieb, co-founders of Livent Inc., were convicted of two counts of fraud and one count of forgery. They each face a maximum of 14 years in prison.

In the 85-page ruling, the judge said the Tony award-winning producers knowingly submitted financial statements to investors misrepresenting their company’s circumstances from 1994 to 1998.

Authorities said the cooked books helped build $100 million in shareholder value that was lost when the alleged fraud at the Toronto-based company was revealed by the new management team headed by former Walt Disney Co. President Michael Ovitz.

Drabinsky and Gottlieb still face charges in the U.S.