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Livent Inc. co-founder Myron Gottlieb knew nothing about a long-running accounting fraud at the company and had no motive to participate in the manipulations, his lawyer argues in closing submissions filed in court this week.

The court filing alleges the real architect of the fraud at Livent was former senior vice-president of finance Gordon Eckstein, who worked in conjunction with several other members of Livent's accounting staff to cook the books and hide the fraud from Mr. Gottlieb and company co-founder Garth Drabinsky.

"The prosecution's reliance on unsavoury, disreputable, self-interested, discredited witnesses has not established with the requisite certainty Mr. Gottlieb's awareness and participation in the accounting improprieties," lawyer Brian Greenspan says in his closing submissions.

Mr. Gottlieb and Mr. Drabinsky are charged with fraud and forgery in connection with the misstatement of Livent's financial statements between 1993 and 1998. Both men have pleaded not guilty.

Their six-month trial ended in early November. Mr. Greenspan filed a written version of his closing submissions and will appear next week to present the arguments orally before Madam Justice Mary Lou Benotto of the Ontario Superior Court.

Mr. Drabinsky's legal team is not expected to file its closing submissions until next week.

In his closing submissions, Mr. Greenspan said Mr. Gottlieb had no motive to participate in a fraud and he made numerous decisions that would make no sense if he knew of the fraud.

For example, Mr. Greenspan said it would be irrational for the two co-founders of Livent to strike a deal to sell a controlling stake to an investor group led by U.S. businessman Michael Ovitz, because the fraud would surely be detected when new owners came into the company.

Similarly, he said the two men wouldn't have agreed to provisions in the deal that only allowed them to sell 100,000 of their shares in the first year after closing if they had known everything could blow up if fraud was detected.

"Had Mr. Gottlieb known there were financial improprieties, it would have been absurd for him to virtually eliminate his opportunity to monetize his investment," Mr. Greenspan said.

He said Mr. Gottlieb's shares were worth $25.5-million in June, 1998, after the deal closed, and he never sold any of them before Livent collapsed later that year.

Mr. Greenspan added Mr. Gottlieb made no reference to the fraud in two confidential memos he wrote to Mr. Drabinsky, including a lengthy memo written earlier in 1998 expressing worries about the Ovitz deal.

"These comprehensive, clearly stated and thoughtful memoranda are not only consistent with innocence but speak eloquently to Mr. Gottlieb's lack of knowledge of any wrongdoing at Livent," Mr. Greenspan said.

Mr. Greenspan's closing submission also criticizes key Crown witnesses at the trial and outlines many alleged falsehoods or inconsistencies in their testimony.

He said the prosecution relied on "disreputable" witnesses who were admitted participants in the fraud. Mr. Eckstein - whom Mr. Greenspan called "a rogue and a liar" - pleaded guilty to fraud and received a conditional sentence of two years less a day. Former chief financial officer Maria Messina was also a participant in the fraud, he said, as were several accounting controllers who testified at the trial that they made false entries in Livent's general ledger.

"It is difficult to conceive of a greater incentive to falsely attribute responsibility to Mr. Gottlieb than the motive to shift blame, which was shared by all of the prosecution's principal witnesses," Mr. Greenspan said.

He said the accounting staff testified at the trial they received all their instructions from Mr. Eckstein. Moreover, he said Mr. Gottlieb was not involved in advertising or the productions at Livent, and was not always present at meetings to review drafts of financial statements.

Mr. Greenspan also argued Mr. Eckstein made the decision to book false invoices as assets on the balance sheet rather than expenses prior to Livent becoming a public company in 1993, and Mr. Gottlieb was unaware the asset figures were misstated when Livent went public.

He added the decision made no accounting sense in terms of benefiting Livent, and the Crown also failed to call any witnesses to testify that the misstated asset figures affected any investor's decision to buy shares at the time of the initial public offering.