Toronto theater impresario Garth Drabinsky was free on bail Wednesday, pending an appeal, after being sentenced to seven years in jail for his role in the 1998 downfall of Livent.

Justice Mary Lou Benotto of the Ontario Superior Court of Justice also sentenced Livent co-founder Myron Gottlieb to six years in prison.

Both men sat impassively as Justice Benotto said they had defrauded Livent investors of up to $500 million between 1993 and 1998 by systematically cooking the company books.

‘Complex systems were in place at Livent to effect all of those [accounting] manipulations. One employee spent his entire time moving expenses from one place to another. He knew it was wrong, but had a family to feed,’ she said.

Both men’s families, who sat in the Toronto courtroom during the sentencing, wiped back tears as they heard the Livent duo were headed to jail.

Drabinsky received four years on one count of fraud and seven years on a second count, to be served concurrently. Gottlieb was handed four years on count one and six years on count two, also to run concurrently.

Both men were also convicted of forgery, but that ruling was stayed by the court on grounds its facts were the same as one of the fraud charges.

The Crown had asked that Drabinsky and Gottlieb spend eight to 10 years in jail, while their defense team requested conditional sentences that included house arrest and lecture tours.

Justice Benotto conceded that Drabinsky and Gottlieb had greatly enhanced the Canadian arts with their 1990s musical theater productions, but added that she could not ignore their fraud and deceit.

‘There was a direct link between the financial manipulations and the share value,’ she argued.

As a result, the court had a duty to denounce Drabinsky and Gottlieb to deter future fraud.

‘Those in business must know and the community must know that this will be the court’s response to corporate fraud,’ Justice Benotto said.

Drabinsky’s ears turned red when the judge said he was ‘the main person in charge’ of the systemic fraud at Livent between 1993 and 1998, and that Gottlieb was ‘caught in a wide net that was most likely meant for Drabinsky.’

The judge, during a 30-minute reading of the sentences, said she considered Drabinsky’s frail health as a polio survivor when determining his jail term. Also taken into account was Gottlieb’s inability to work since being charged in 2001 on the fraud and forgery charges.

Drabinsky, on the other hand, has worked during the last decade, most recently on the CBC TV show Triple Sensation, Justice Benotto observed.

At the same time, the judge said the sentence needed to signal no one was above the law. ‘No one gets to write his own rules,’ she argued.

And with that, Gottlieb and Drabinsky, both grim-faced, were led away by armed guards to holding cells — Gottlieb in handcuffs — so that they could post bond and be released.

The law allows first-time, non-violent offenders to serve only one-sixth of their jail terms before they can secure parole. Should their appeals fail, Drabinsky is expected to eventually serve 14 months in jail, and Gottlieb one year.