Blogs & Comment

"Trapped" into aiding Livent fraud pt. 1

The 10 years that have passed since Livent collapsed into bankruptcy amid allegations of widespread accounting fraud have done little to cool the hurt and anger of the first prosecution witness in the criminal fraud trial of company founders Garth Drabinsky and Myron Gottlieb. Peter Kofman, an engineer who did development and project management work for many of Livent’s theatres, testified he was a reluctant participant in two different schemes that prosecutors allege siphoned millions of dollars into Drabinsky and Gottlieb’s pockets and also helped to improperly boost the theatre company’s revenues.
Drabinsky and Gottlieb are charged with two counts of fraud and one count of forgery in connection with the alleged massive accounting fraud that occurred at the company. Both men have pled not guilty.
At times, a clearly angry and agitated Kofman described how he felt he had no choice but to go along with one scheme that saw his company — Kofman Engineering Services Ltd. — pay Drabinsky and Gottlieb millions of dollars for “introductions” and other allegedly bogus business development work between 1990 and 1993. The second scheme involved Livent’s purchase of hundreds of thousands of dollars of tickets to its production of Ragtimein Los Angeles in Kofman’s name in 1997 and 1998. Prosecutors allege that those purchases were made not only to fraudulently make the production seem more profitable than it actually was, but that those payments were improperly recorded on Livent’s books as assets, thus improperly boosting the value of the company.