July 6, 2009
A high-profile case providing a Canadian perspective on white-collar sentencing
This Bloomberg news article, headlined "Prosecutor Seeks 8-10 Years for Ex-Broadway Producers," provides an interesting comparative perspective on white-collar sentencing debates. Here are a few excerpts:
Garth Drabinsky and Myron Gottlieb, once Broadway producers with hits like “Ragtime,” should spend 8 to 10 years in prison for defrauding investors of millions of dollars, prosecutor Alex Hrybinsky said today at the start of a sentencing hearing in Toronto.
Drabinsky, 59, and Gottlieb, 65, were charged by police in October 2002 with lying about finances at the defunct theater producer Livent Inc. for nine years as they raised about C$500 million ($431 million) to buy theaters in Toronto, Chicago and New York and paid for increasingly lavish productions, including “Fosse” and “Phantom of the Opera.” “This is an enormous fraud,” Hrybinsky said at the hearing. “A sentence of 8 to 10 years is merited.”...
Drabinsky’s lawyer Edward Greenspan urged the judge to consider his client’s contribution to Canadian theater, Toronto’s economy and to use compassion in sentencing considering Drabinsky has suffered from the effects of polio since the age of 4 that left him partially disabled and in pain. “It makes incarceration more difficult,” Greenspan said. “In a practical sense, it makes it more punitive.” Greenspan suggested that Drabinsky should be given a conditional sentence of two years, less a day, of which a year could be served under house arrest and three years probation....
Drabinsky and Gottlieb are fugitives from U.S. law, having being indicted in 1999 on similar fraud charges by a federal grand jury in New York. They have refused to appear in a U.S. court. The U.S. has an extradition request on hold, pending the outcome of the trial in Toronto. Their case has been compared with that of Conrad Black, the former chairman of newspaper publisher Hollinger International Inc. Black was sentenced to 6 1/2 years in prison following a trial in Chicago where he was convicted of defrauding company shareholders of $6.1 million and obstructing justice.
“Conrad Black’s sentence would have been somewhat more lenient if he were prosecuted in Canada,” said Alan Mark, chairman of the Toronto Litigation Group at Ogilvy Renault, who wasn’t involved in the Livent case. “There was a lot of tension between sentencing practices in Canada and the U.S. in Hollinger.”
Interesting case, eh?
July 6, 2009 at 05:43 PM | Permalink
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Defang the incendiary rhetoric typically wedged into charging documents and the line between ventures that simply fail and "enormous fraud" can seem quite thin.
It's also possible that no deal is deception-free or capable of surviving scrutiny by zealous prosecutors?
Beyond that, shouldn't would-be investors know better by now? Showbiz con men are legendary. And virtually none of us survives childhood without memorizing the "fool and his money..." and "all that glitters..." phrases.
So just how severely should the government be punishing showmen who nonetheless manage to raise money with a smile and a shoeshine? Put another way, exactly what does society owe gullible, greedy investors when their get-rich-quick deals fall flat?
Elaborate campaigns reminding citizens of the rewards of skepticism would at least be cheaper than stalking and imprisoning for decades every con man who takes a mark.
Posted by: John K | Jul 7, 2009 12:01:13 PM