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Charla Jones/The Globe and Mail

Livent Inc. co-founder Garth Drabinsky deserves "minimal incarceration" for his role in an accounting fraud at the live theatre company, his lawyer told a Toronto court Monday.

Edward Greenspan said his client has significant medical problems related to a case of childhood polio, so a prison sentence would be "more punitive" for Mr. Drabinsky.

"It has a genuine impact on where he serves his sentence," Mr. Greenspan said.

Earlier at the sentencing hearing Monday, Crown Attorney Alex Hrybinsky asked the court to impose a sentence of eight to 10 years for Mr. Drabinsky and partner Myron Gottlieb, who were found guilty in March of two counts of fraud and one count of forgery for misstating the financial statements of Livent between 1993 and 1998.

But Mr. Greenspan urged Madam Justice Mary Lou Benotto to consider other factors in her sentencing, including testimonials in 46 letters provided by family, friends and prominent members of the artistic community.

The letters came from such luminaries as actor Christopher Plummer, director Harold Prince, writer E.L. Doctorow, actress Martha Henry, actor Brent Carver, dancer Karen Kain, painter Alex Colville, architect Moshe Safdie and former Toronto mayor David Crombie.

In excerpts from the letters read aloud in court, many of the celebrities praise Mr. Drabinsky's role in encouraging the development of the arts in Canada.

Ms. Henry asks the judge to consider leniency in her sentence, noting Mr. Drabinsky "should live to flourish again."

Mr. Gottlieb's lawyer, Brian Greenspan, is expected to make his submissions on sentencing Tuesday.

Under sentencing guidelines in 1998, when the crimes occurred, the two counts of fraud each carry a maximum jail term of 10 years while the maximum sentence for forgery is 14 years.

The Toronto-based live theatre company - best known for staging hits such as Phantom of the Opera, Show Boat and Ragtime - collapsed in 1998 after new investors, led by Hollywood heavyweight Michael Ovitz, alleged they had uncovered evidence of accounting manipulations shortly after taking control of the company. Livent later filed for bankruptcy protection and sold off its assets.

During their trial last year, the court heard testimony from former employees who said they were instructed each quarter to change accounting entries to ensure the company would meet increasingly unrealizable profit targets. Three former employees testified they attended meetings where they heard Mr. Drabinsky or Mr. Gottlieb discuss financial manipulations. The Crown also filed numerous internal company documents, including memos summarizing accounting manipulations in each year.

In her ruling in March, Judge Benotto said the crime "was widespread and long-standing" and said she was satisfied beyond a reasonable doubt that the men knew about the manipulations.

Judge Benotto rejected defence arguments that the accounting manipulation was masterminded by Gordon Eckstein, the company's former senior vice-president of finance. The defence alleged he conducted the fraud behind the backs of his bosses.

The judge said she did not believe Mr. Eckstein would have conducted the fraud independently, and said he would not have prepared documents summarizing the manipulations for his managers if he were trying to hide the fraud from them.

Mr. Eckstein pleaded guilty in 2007 to one count of fraud and was given a conditional sentence of two years less a day. He did not serve any time in jail, but received a one-year period of house arrest with some exceptions, plus agreed to a further three-month period under curfew from 7 p.m. to 7 a.m. each day.

Mr. Hrybinsky, the Crown Attorney, said the two men deserve significant penitentiary sentences because of the "enormous" size of the fraud and because it was ongoing every quarter between 1993 and 1998.

"It was by no means a one-time event or a lapse in judgment," he said.

He said the men have shown no remorse and have continued to blame others for the crime.

And he added the men were officers of a public company, which placed them in a position of trust. This is a "major aggravating factor" under law when determining sentences, Mr. Hrybinsky said.

He also cautioned the judge not to be swayed by the position of the two men in the entertainment or business communities, noting courts have long held that social status should not be considered a mitigating factor in frauds because it is often a necessary condition to carry out the crime.

Read the letters of support: