It was speed-dating day at the criminal fraud trial of Livent founders Garth Drabinsky and Myron Gottlieb as the court completed the testimony of three witnessesin one day. In a trial where its been par for the course to keep witnesses on the stand for more than a week, thats impressive.
But before the court could hear lightning-fast testimony from former Echo Advertising and Marketing Inc. executives Robin Pullen and Len Gill, defence lawyers had to take one last kick at the can with Chris Craib, the former Livent controller, who spent the last two weeks on the witness stand.
And Edward Greenspan, the defence lawyer representing Drabinsky, didnt miss the opportunity to introduce another theory about that now notorious April 24, 1998 executive meeting where Craib says Drabinsky discussed plans to manipulate the companys financial results.
Greenspan wrapped up his cross-examination on Tuesday, but was allowed to re-examine Craib on the issue of the notes Craib said he took at that meeting. Prosecutors only had photocopies of the notes and had to scramble last week to locate the originals that were finally discovered in the files of the U.S. Department of Justice.
Craib testified that he did not even remember having the notes until sometime after being interviewed by Livent lawyers and the U.S. Securities and Exchange Commission. Craib said he could not remember when or even where he had found the notes, which gave Greenspan the opportunity to present the court with his own theory about the notes.
Greenspan suggested to Craib that sometime between his interview with the SEC and the Department of Justice, Craib found a set of notes from a meeting held on April 23 with Gord Ecsktein, Livents former vice president of finance and administration, in which directions for accounting manipulations were actually given. He then added the initials Per GHD/GE at the top of the notes to make it appear that they were from a meeting between Drabinsky and Eckstein on April 24.
You presented to the Department of Justice the April 23 notes masquerading as April 24 notes supported by your testimony of a 2 p.m. April 24 meeting that you know is false, Greenspan said.
No, Craib replied.
Craib looked exhausted and beaten as he left the stand after more than six days under intense cross-examination from both Eddie and Brian Greenspan (Brian Greenspan is representing co-defendant Gottlieb.)
And it may not be over for him yet.
Before he could leave the witness stand Eddie Greenspan asked Madam Justice Mary Lou Benotto to keep Craib under court subpoena until the end of next week pending a possible application the defence lawyer may make next week. He would not tell the court the subject of his application.
The experience ofCraib and the two Echo Advertising executives who testified next was a study in contrasts. While Craibs time on the stand was long and brutal, the testimony of Pullen and Gill was short and sweet. Combined, both men spent just over an hour on the stand and that includes cross-examination.
Pullen, Echos former vice-president of administration, testified that for three years running, Livent asked him to cancel advertising invoices issued at the end December and re-issue those invoices in January in the new calendar year.
Eckstein first approached him with the request in late 1994, Pullen told the court. Former Livent controller Grant Malcolm later faxed him a list of invoices to be cancelled and re-issued.
Prosecutor Amanda Rubaszek took Pullen through copies of the invoices that were cancelled in 1994. One batch of invoices, for more than $172,000, covered radio and newspaper advertising in U.S. cities like Cleveland, Detroit, Rochester, N.Y., and Buffalo, N.Y., promoting Show Boatin Toronto.
Other documents displayed in court showed that Echo was asked to cancel and re-issue invoices worth more than $1 million in 1994, and nearly $2.5 million in 1995. By 1995 Livent was not even waiting for the invoices to be issued and was asking Echo to defer billings until at least January, Pullen told the court.
Pullen also testified that he responded to requests from Livents auditors to provide billing information. However, the totals Echo provided did not include the invoices that had been moved from the previous years, Pullen told the court. The move was part of a scheme to mislead auditors, Malcolm told the court earlier in the trial.
In a brief cross-examination Greenspan pointed to a handwritten notation on one of those confirmation requests that suggested the auditors had noted the discrepancy. The note, which was not signed, said that the amount was not included the auditors reconciliation since the supplier has sent an amended statement with significantly different amounts per this confirmation.
The testimony of Pullens old boss Gill was even shorter. Gill testified that Livent was a significant Echo client and that he attended three out of four, of Livents weekly three-hour advertising meetings held at Livents office and chaired by Drabinsky. Through that business relationship, Gill developed a friendship with Drabinsky, he told the court.
Gill approved Livents request to push invoices into a future period after he received assurances from either Gottlieb or former Livent chief operating officer Robert Topol that Livent would adhere to its contractual agreement to pay its bills within 60 days. The reason I approved it was because they said it wouldn’t affect our cash flow, Gill said.
Aside for changing date the invoices were issued, Livent executives never asked him to change the content or the context of the invoices, Gill said. We would not have, and could not have done that. Our system would not allow it, he told the court.
As time went on, Livent did have difficulty paying its weekly advertising bills, Gill said. On several occasions Gill had to negotiate payment plans with Gottlieb. But in the end, Livent always paid its bills and when it was late, Echo would charge the theatre company interest or other penalties, he said.
Gill told Brian Greenspan that Livents request to push its advertising invoices into a different period was not a surprising request. In an RCMP interview in 2001, Gill told police that it was a common practice. We accommodate clients like this all the time, Gill said in the transcript.
Despite the abbreviated and almost friendly cross-examination, Gills testimony may still cause some trouble at Gottliebs next family dinner. Greenspan asked Gill about the time in 1994 when he asked Gill to give his daughter a job. Gottlieb offered to pay half her salary in order to give her something to do before she started her studies at a design school, Greenspan said. Actually, Myron paid the complete amount of his daughters salary, not just half, he said.
David Roebuck, a lawyer representing Drabinsky, handled what is certainly the shortest cross-examination at the trial. He asked if Drabinsky asked peoples opinions at the meetings. He did, said Gill.
And you found the meetings stimulating from a creative point of view? Roebuck asked.
Sometimes yes, and sometimes no, Gill replied.
And you enjoyed being there? Roebuck continued.
Sometimes yes, and sometimes no. I wouldnt have kept going if I didnt, Gill said.
The trial resumes next Monday with testimony from Paul Coort, a forensic accountant who works with the RCMP.