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Witness complained to Gottlieb, court told

TORONTO -- Livent Inc. began accurately labelling purchases of Ragtime show tickets after a contractor involved in an alleged ticket fraud complained about the scheme to Livent co-founder Myron Gottlieb, a Toronto court heard yesterday.

Peter Kofman, whose firm provided project management services to Livent, testified that he agreed to participate in a scheme that saw him buy $1.2-million worth of Ragtime tickets to give the impression of strong sales for the show in Los Angeles. He said he was reimbursed by issuing phony invoices to Livent for engineering services.

Mr. Kofman is the first witness to testify at the trial of Mr. Gottlieb and Livent co-founder Garth Drabinsky, who are both accused of fraud and forgery in connection with alleged misstatements of the financial position of Livent between 1993 and 1998.

Both men have previously said they are not guilty of the charges, and have suggested others at Livent carried out accounting schemes without their knowledge.

During cross-examination yesterday in the Ontario Superior Court, Mr. Kofman said he complained directly to Mr. Gottlieb about the Ragtime ticket purchases in December, 1997, after learning his personal credit card had been used by Livent without his knowledge to buy tickets.

Lawyer Brian Greenspan, who is representing Mr. Gottlieb, asked Mr. Kofman how Mr. Gottlieb responded.

"He was not happy with that," Mr. Kofman replied.

Mr. Greenspan showed Mr. Kofman a series of invoices and cheques dated between September and December, 1997, which stated that Mr. Kofman was being paid for work on Livent theatre projects in New York and Chicago. Mr. Kofman testified that in reality the cheques were repayment for ticket purchases in Los Angeles.

Then Mr. Greenspan showed Mr. Kofman other cheques beginning in December, 1997, which included stubs stating the payments were for "Amex card reimbursement - LA." Mr. Greenspan suggested those documents contained an accurate description of what Mr. Kofman was being paid for.

"I'd suggest that when Mr. Gottlieb is involved, the payment amount and the description is accurate," Mr. Greenspan said.

Mr. Kofman also testified he could not recall who initiated the ticket-buying scheme, but believed it was former Livent executive Gordon Eckstein, who was senior vice-president of finance. He said he was never clear on whether Mr. Eckstein was acting independently.

"I could never tell the extent to which he was pushing his own weight around or was under the direction of others," he said.

Also yesterday, lawyer Edward Greenspan, who is representing Mr. Drabinsky, pressed Mr. Kofman about whether he knew it was standard practice in the theatre industry to "paper the house" or hand out complimentary tickets to fill empty seats. Mr. Kofman said he did not know about theatre management, but that he felt the scheme he was involved in was improper.

© The Globe and Mail

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