TORONTO -- The two co-founders of North America's once largest live theater company, Livent Inc., were found guilty of fraud and forgery in Toronto Wednesday.

After a nearly year-long trial Justice Mary Lou Benotto of the Ontario Superior Court found Garth Drabinsky and Myron Gottlieb guilty of the corporate crimes, the Globe and Mail reported.

The pair founded Livent in 1990, but it collapsed in 1998 after investors claimed there had been accounting discrepancies, the Toronto Star said.

Defense attorneys argued the two men had been hoodwinked by accounting staff, but the judge disagreed.

"The financial statements were manipulated," Benotto ruled. "That's a guilty verdict."

The trial started last May and included 14 witnesses and 237 exhibits, and produced more than 7,000 pages of transcript, the Star said.

Each count of fraud carries a maximum jail term of 10 years, while the maximum sentence for a count of forgery under 1998 guidelines is 14 years, the newspaper said.

Sentencing arguments were scheduled for April 8, the reports said.

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