There's No Business Like Scam Business

Summary

Scamfluencers: Episode Summary – "There's No Business Like Scam Business"

Released on October 21, 2024 by Wondery

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Introduction

In the gripping episode titled "There's No Business Like Scam Business," hosts Scaachi Koul and Sarah Hagi delve deep into the intricate tale of Garth Drabinski, a once-celebrated Canadian theater producer whose meteoric rise in the world of Broadway was marred by deceit and financial fraud. This detailed narrative uncovers the layers of ambition, manipulation, and the devastating impacts of Drabinski's actions on the theater industry and his victims.

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Garth Drabinski's Early Life and Beginnings

Early Struggles and Passion for Theater

Garth Drabinski's journey begins in the summer of 1953 in Toronto, where, as a young child battling polio, he develops a relentless determination to overcome adversity. By high school, his passion for the arts blossoms, leading him to produce a successful high school musical that raises $25,000—a clear indicator of his future ambitions in theater production.

Notable Quote:
“Garth is a man with a vision. But eventually, all his theatrical deception bring his big show to its crashing finale.”
— Sarah Hackey [05:02]

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Rise with Cineplex and Livent

Expansion into Live Theater

In January 1988, Garth co-founds Cineplex Odeon, transforming Canadian movie theaters into luxurious venues. Despite initial successes, Cineplex faces financial strains due to rapid expansion and overspending on renovations. Seeking salvation, Garth seizes the opportunity to bring Andrew Lloyd Webber's "The Phantom of the Opera" to Canada, believing it to be the key to revitalizing his faltering company.

Notable Quote:
“Why is a producer a brilliant producer if you're also stealing money from the production.”
— Slachi Cole [34:44]

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Fraudulent Activities and Deceptive Practices

Creation of Livent and Financial Manipulations

Garth's acquisition of the Canadian rights to "Phantom of the Opera" leads to the formation of Livent, his new company. Although initially successful, Livent's rapid growth is fueled by fraudulent accounting practices. Garth, desperate to maintain financial stability, manipulates Livent's books through kickback schemes and income smoothing, falsely inflating the company's profitability to attract investors and secure loans.

Notable Quote:
“Income smoothing is what I call it when I steal money. I am simply smoothing my income and also someone else's.”
— Gordon Eckstein [24:38]

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Impact on Employees and Victims

Toxic Workplace and Coercion

Livent's internal environment becomes increasingly hostile under Garth's leadership. Gordon Eckstein, Livent's VP of Finance, exemplifies the toxic culture by berating employees and enforcing compliance with fraudulent activities. Maria Messina, Livent's CFO, discovers discrepancies in financial reports and faces immense pressure to conform, leading her to participate in further deceit to protect the company's facade.

Notable Quote:
“Shut the fuck up. You’re not paid to think.”
— Gordon Eckstein [19:34]

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Downfall and Legal Consequences

Exposure and Legal Battle

The unraveling of Livent's fraudulent activities begins when Michael Ovitz, a Hollywood titan, takes an interest in Livent. Upon discovering the true financial state through whistleblowers like Maria, Ovitz exposes the fraud, leading to Livent's bankruptcy and Garth's indictment on multiple felony counts. Fleeing to Canada, Garth evades immediate arrest but ultimately faces conviction in 2009, serving five years in prison.

Notable Quote:
“The exponential growth of the company was analogous to an athlete taking a performance enhancing drug. The result may be spectacular, but the means involve cheating.”
— Judge [33:03]

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Attempted Combacks and Final Fall

Struggles to Reinvent Post-Conviction

Upon his release, Garth attempts to regain his footing in the theater world by producing new shows like "Madame Swusotska" and "Paradise Square." However, his efforts are marred by poor reviews, financial mismanagement, and continued unethical behavior. His inability to reconcile his past actions with his present endeavors leads to further professional setbacks, culminating in a lifelong ban from working with Actors Equity and the collapse of his latest productions.

Notable Quote:
“We took the position that in an enlightened society, when somebody does something wrong, you want to think that after they pay their dues, they can be resurrected.”
— Susie Medack [38:45]

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Conclusion and Reflections

The Legacy of Garth Drabinski

Garth Drabinski's story is a cautionary tale of how ambition and brilliance can be overshadowed by unethical practices. His journey from a passionate theater producer to a convicted fraudster highlights the vulnerabilities within industries that rely heavily on financial manipulation and the devastating effects on those who trust and work alongside such individuals. The episode underscores the importance of transparency, ethical leadership, and the far-reaching consequences of deception.

Notable Quote:
“You can't be a good producer if you're a piece of shit.”
— Slachi Cole [43:54]

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Key Takeaways

• Ambition vs. Ethics: Garth's relentless pursuit of success led him to compromise his integrity, demonstrating the thin line between ambition and unethical behavior.

• Impact of Fraud: The financial deceit not only ruined Livent but also eroded trust within the theater community, affecting countless employees and stakeholders.

• Redemption Challenges: Even after serving his sentence, Garth's attempts at redemption were hindered by his past actions, illustrating the long-lasting repercussions of fraud.

• Industry Vulnerabilities: Livent's story exposes the potential for financial manipulation within the arts, emphasizing the need for stringent oversight and ethical standards.

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Notable Sources Referenced in the Episode

• "A Producer Seeks a Broadway Comeback" by Richard Zodiac, The New York Times
• "As If We Never Said Goodbye" by Mark Herzberg, Forbes
• Reports by Peter Smalls, Toronto Star
• Garth Drabinski's memoir, Closer to the Sun

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This summary provides an in-depth look into the complex narrative of Garth Drabinski as presented in the "There's No Business Like Scam Business" episode of Scamfluencers. For those interested in the dark side of influence and the mechanics of financial fraud within the entertainment industry, this episode is a compelling exploration of ambition gone awry.

Transcript

[Sarah Hackey]

Wondery subscribers can listen to Scamfluencers early.

[Slachi Cole]

And ad free right now.

[Sarah Hackey]

Join Wondery plus in the Wondery app or Apple Podcasts. Wonder Sachi I feel very strongly when we get to cover a Canadian scammer. What is it about a homegrown freak that we just love?

[Slachi Cole]

I mean, I think it's just cause Canada's so small, so anytime we get anything we're like, hey, that's one of us.

[Sarah Hackey]

It is really hard to make as a Canadian, especially in the arts. And there's always a sense of national pride when someone becomes famous.

[Slachi Cole]

Yeah, I love all Canadian scammers, murderers, philanderers, whatever you got.

[Sarah Hackey]

Well, today I'm going to tell you about a scammer you may not have heard of, but unfortunately he has made a big impact on both sides of the border. It's June 1998 and Garth Strabinski is sitting in the audience at New York's Radio City Music Hall. Garth is a 49 year old theater producer from Toronto. He has a broad frame, floppy brown hair and wire rimmed glasses and he's here for the Tony Awards. Garth is surrounded by some of Broadway's biggest stars who are all dressed to impress. He watches as award after award is presented and actors stage performances from the season's biggest musicals. The cast of the Lion King sings the Circle of Life and Alan Cumming wows the audience as the MC from Cabaret. Garth tries to enjoy the show, but as the night goes on he starts to feel more and more nervous because his theater company is in major financial trouble and he's bet everything on his latest production, Ragtime. Ragtime is a sweeping epic about three diverse families trying to make it in New York at the turn of the century. It's been nominated for 13 Tony Awards, which is more than any other production, but so far it's only won a couple. Despite its critical acclaim, Ragtime's ticket sales have been suffering. A best musical win would really help get more butts in seats. Historically, the show that wins the Tony can expect at least a 34% increase in ticket sales, and Garth really needs this. If he can't make his company's investment back, he's going to lose his job, his reputation, and maybe even more. But Garth hasn't lost hope yet. And now it's time for the big moment. He holds his breath as actor Nathan Lane takes the stage to announce the winner for the biggest award of the best new musical. The nominees are Ragtime, Sideshow, the Lion King and the Scarlet Pimpernel. And the best new musical of 1998 is the Lion King. Garth is devastated. In an instant, his hopes are dashed. And even worse, his secret is gonna get out. He's not just in a financial hole, he's been falsifying his company's financial records for years to keep his shows afloat. He needs needs Ragtime to succeed, to keep the cash flowing. And without the Tony win, Garth is almost certainly screwed.

[Slachi Cole]

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[Sarah Hackey]

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[Slachi Cole]

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[Sarah Hackey]

There's also the year's best fiction, like the Women by Kristin Hannah and Percival Everett's brilliantly subversive James. I would love to listen to Sally Rooney's Intermezzo. It just came out this year and I think it was one of my favorite 24 releases.

[Slachi Cole]

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[Sarah Hackey]

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[Slachi Cole]

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[Sarah Hackey]

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[Slachi Cole]

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[Sarah Hackey]

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[Slachi Cole]

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[Sarah Hackey]

From wondery I'm Sarah Hackey. And I'm Slachi Cole and this is Scamfluencers. Come and give me your attention. I won't ever learn my lesson. Turn my speaker to 11. I feel like a legend. Garth Drabinski is a world famous producer who really believed the show must go on by any means necessary, even if that Required a little fraud. Garth is a man with a vision. But eventually, all his theatrical deception bring his big show to its crashing finale. This is there's no business like scam business. It's the summer of 1953 in Toronto and three year old Garth Drabinski is running around in his backyard when all of a sudden he collapses. Barely conscious, he's driven to the hospital where he's diagnosed with polio. This is before a vaccine was created, so it's really scary. Polio is super contagious and can lead to paralysis and even death. Garth can't move his left leg and is confined to a bed in a hospital ward full of other sick kids. Imagine the orphanage in Annie, but with a deadly illness and no singing. Garth's parents can only visit every once in a while and he feels abandoned. He later refers to the months he spent in this ward as an air conditioned nightmare. His only comfort is the transistor radio, which plays a mix of classical music and rock and roll. Garth falls in love with music.

[Slachi Cole]

This is cartoonishly sad and also like an incredible origin story that would play really well in a documentary about someone's life.

[Sarah Hackey]

Yeah, it is really cinematic and quite fitting for this story. As you will see, Gart survives the illness, but over the next eight years, he has multiple major surgeries to save his legs. While his classmates go to sleepaway camp, Garth spends his summers on the operating table. He's left with a permanent limp, but he also develops a never say die attitude. Garth believes that he can get through anything if he puts his mind to it. By high school, he's overcome the worst of polio. So he turns all his determination into pursuing his passion for music and the arts. By now, this passion has expanded to include theater, musicals and movies. At 18, he puts on a musical variety show at his high school. The show's a huge success. It takes in $25,000. Garth realizes he's not meant to be a performer, but he's got a gift for producing. And he can't wait to feel the rush of opening night again and again and again. It's January 1988, about 20 years after Garth graduated high school and and he's in London to see a new musical, the Phantom of the Opera. Garth has a shitty seat and can't even see the iconic chandelier fall, but he's still awestruck by the production. He leaves the theater glowing. As a man with a physical disability, he feels a special connection to the musical central character, the Phantom. Here's how Garth explains it years later to a TVO journalist in Phantom of the Opera. You know, it was that distorted individual who was born with a disfigurement, and yet he had a soul that was stirring and memorable, and I was able to relate to that. But there's something else that appeals to Garth about Phantom its success. The show has been a huge hit in England. It's about to open on Broadway and already sold $18 million in advance tickets. Garth is sure that if he can secure the Canadian rights to the show, he could make a fortune. And he needs this money. About a decade ago, Garth co founded a chain of Canadian movie theaters that has grown into Cineplex Odeon.

[Slachi Cole]

Sarah, that's nuts. This is a huge movie theater chain in Canada. Amongst the biggest, for sure. And like, those theaters have Italian marble floors and really big seats and like, customable carpets. Like, that was a moneyed movie theater. He started Cineplex.

[Sarah Hackey]

Yeah, he's one of the people who started Cineplex. And yeah, it's like it made going to the movies feel like, special, right?

[Slachi Cole]

Yeah, it was a special event if you were going to a Cineplex movie in the 90s.

[Sarah Hackey]

Totally. From the outside, Garth's company looks like a success, but they're growing too fast and spending way too much money on renovations. Profits aren't keeping up. Despite that, Garth is expanding Cineplex beyond movie screens and getting into live theater. The company's board isn't psyched about it. They have serious reservations about Garth's leadership and vision for the company. But on this trip to London, Garth becomes convinced that if Cineplex can get the Canadian rights to the Phantom of the Opera, it will be a huge money maker for the company and will hopefully be enough for him to keep his job. He arranges to meet with the artist behind the show, Andrew Lloyd Webber. Andrew is on the cusp of turning 40 years old and is currently the world's biggest musical theater composer. Before Phantom, he wrote hits like Evita, Jesus Christ Superstar and Cats. Garth had already asked mutual friends to talk him up to Andrew. But Andrew still has a lot of questions for Garth. Like, why is a movie theater company getting into the musical business? And does Toronto even have a stage big enough for something as epic as the Phantom of the Opera? Garth tells him he plans to renovate one of Cineplex's theaters, the Pantages, but Andrew's still not sure. So Garth pulls out the big guns. He offers to pay Andrew $1 million upfront for the rights and promises to have the theater and show up and running by the fall of 1989. About 18 months from now, Andrew finally agrees, and Garth becomes the proud owner of Phantom's Canadian rights. But Garth can't revel in this for long because his company is still in deep trouble. Cineplex's debt is up to $650 million. Around this time, the board wants to sell the company to get what they can and call it a day. But Cineplex is Garth's whole life. He asks for time to put together an offer to buy the company back himself. They give him until just after Phantom's premiere to come up with the financing. He hopes a successful opening for Phantom will convince investors to chip in some major cash. But Phantom is a very complicated production. The Pantages needs a 20 million Canadian dollar renovation before the show can open. The theater needs a new basement for extra dressing rooms and storage. Nearly 200 trapdoors need to be built into the stage itself. And the orchestra pit needs to be expanded to fit 40 musicians and fitted with a hydraulic lift.

[Slachi Cole]

It seems pretty bold that he's going to bank not only on Toronto audiences wanting to see this particular musical in this particular space, but also the amount of money that he's pouring into this renovation. Even if the show's a success, it could still mean that they don't get out of this financial hole.

[Sarah Hackey]

Yeah, it is truly a big gamble. But in September 1989, the Phantom of the Opera opens in Toronto. The show goes off without a hitch. The cast gets a standing ovation from the star studded audience, including Prince Edward. But despite the show's success, Garth isn't able to raise enough money to buy Cineplex and keep the company. A little over two months after the premiere, Garth resigns from his own company. As part of his exit package, Garth buys a newly renovated Pantages theater and the Phantom rights for $65 million. He borrows most of the money and plans to leave cinema behind and build a musical theater empire. As Garth leaves the building for the last time, he loudly announces that with his exit, culture at Cineplex is over. Then later that same day, Garth sits in the orchestra of the Pantages theater and addresses the cast and crew of Phantom. Sachi, can you read what he says?

[Slachi Cole]

He says, you are now officially my new family. I love this theater. I love all of you. He's kind of a drama queen. This is really dramatic.

[Sarah Hackey]

He is incredibly dramatic. Garth is pinning all his hopes on Phantom success. His life in the movies may be behind him, but his theater career is just getting started. Garth's big bet pays off. Phantom quickly starts grossing $1 million a week. Garth's new company, Livent, earns back his investment and then some. And the Pantages becomes the highest grossing theater in the world. The show will play for the next decade with more than 4,000 performances. But all the turmoil of the last few years has depleted Garth's personal accounts. He's borrowed and spent a lot of money. He wears the finest clothes, dines at the best restaurants, has a staff of underlings, and travels by limousine and private jet. Around the time he forms Livent, he's $8 million in debt. So while he waits for Phantom to get him back into the Black, Garth starts messing with Livent's books. He and another Livent executive create a kickback scheme. They get one of the construction companies they work with to send Livent an invoice for fake work. They have Livent approve the expenses. Then a shell company controlled by Garth and the other executive invoices the construction companies for the same amount. Garth steals over $6 million in the first four years of owning Livent. But with Live Ent's early success, Garth sets out to stage another show. In the summer of 1992, less than three years after Phantom's premiere. He produces another Andrew Lloyd Webber musical, Joseph and the Amazing Technicolor Dreamcoat. The production stars Donny Osmond, whose career has been in a slump ever since the cancellation of the Donny and Marie show. Garth gives Donnie a chance to turn things around, and he's an instant hit. And please keep in mind that Donnie's in a loincloth for half this show.

[Slachi Cole]

I'm sure that's what made it so popular.

[Sarah Hackey]

Sex sells Saatchi. Well, once again, Garth has a money machine on his hands. Over the next five years, this production of Joseph and the Amazing Technicolor Dreamcoat will GROSS More than $200 million. Broadway shows are typically funded one at a time with money from individual investors. But Garth runs Livent more like a movie studio. The company puts on multiple shows at the same time and uses what it makes from hit shows to fund future productions. It also does everything for the shows in house, from making the costumes to marketing and even owning the theater itself. This new format opens a door for Garth to do some funny math. He shifts expenses far into the future, falsely claims that expenses on some shows are actually the cost of developing new shows, and uses other accounting tricks to majorly overstate Livent's value. With this easy cash flow, Garth keeps Adding more projects to live and Slate, including a new musical called Kiss of the Spider Woman. He hires Broadway legend Chita Rivera to lead the Canadian premiere. And after a successful run in Toronto and London, Garth transfers the show to theater's biggest stage, Broadway. And then in May 1993, Livent goes public in Canada and raises $40 million in a public offering. With all this new money, Garth's company is about to take American theater by storm. In June 1993, Kiss of the Spider Woman dominates the Tony Awards. It wins seven awards, including Best Musical and Best Actress for Chita Rivera. But even though it's a critical smash, the show is still struggling to make money. The Tony wins momentarily boost ticket sales, but it doesn't last. Six months after the show's opening, Garth's company has made back less than a quarter of its original investment. But does this stop Garth? Hell no. Just four months after Kiss of the Spider Woman's Tony wins, Garth turns his attention to another show he's been developing, a revival of Showboat. It opens in Toronto to rave reviews. And Garth immediately starts planning the show's future on Broadway. And because it's Garth, he decides it needs to be extravagant and talked about for years to come. So he hires a 71 person cast and a 30 piece orchestra, which he claims is twice the size of the average Broadway show. When the Musical opens in 1994, it's the most expensive show to ever hit Broadway. It costs $600,000 a week to put up. This means Garth needs to sell that amount in tickets every week just to break even. But he's not deterred. Instead, livent spends over $1.5 million on advertising and hosts a six figure opening night party at the Plaza Hotel.

[Slachi Cole]

I think a worthy investment when you are already in huge debt.

[Sarah Hackey]

It really stresses me out. The show is another critical smash and earns record ticket sales. But it's still just too expensive. The ticket revenue is no match for Garth's spending. Even the infusion of cash from going public and selling shares isn't helping at this point. Livent is millions of dollars in the red. And with each new show compounding their debt, Garth has no way of digging himself out. So Garth has Live Entz accountants start keeping two sets of books. The real books and the ones they'll make available to stockholders and auditors. Garth is willing to create as toxic an environment as necessary to get his accountants to commit fraud. He purposely hires introverts who won't push back. And Garth has an enforcer, his VP of finance and administration. Corden Eckstein. Gordon's been called a dictator and a bully and frequently calls staff stupid. Saatchi, will you read what Gordon allegedly screamed at an accountant who pointed out potential financial inconsistencies?

[Slachi Cole]

Yeah, he said, shut the fuck up. You're not paid to think. Okay, I find this odd because that's expressly what one would pay an accountant to do.

[Sarah Hackey]

Yeah, that's literally their job. But with these new fake books, Garth's company looks like a total success and he's feeling invincible. To give you a sense, Garth is writing his autobiography while still in his 40s. It's called Closer to the sun and the theme is basically that Icarus should have just tried harder. And throughout this financial disaster, Garth keeps paying himself millions of dollars in compensation each year. He's committed to producing amazing musicals, but he isn't willing to make personal sacrifices to actually make them profitable. Garth again finds himself on the top of a crumbling empire, and he knows exactly what will save him. Another musical.

[Slachi Cole]

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[Sarah Hackey]

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[Slachi Cole]

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[Sarah Hackey]

I Feel like a It's the summer of 1997 and Maria Messina is about to take a much closer look at Livent's books. Maria is in her early 30s, she's got blonde hair, and she's a single mom with a little girl at home. Normally she isn't allowed this much access to the company's finances. That's despite the fact that she's the CFO and she actually worked as Livent's auditor for years before being hired here. But right now her boss, Gordon Eckstein is out of town and so the accounting staff has just handed her Livent's second quarter finances to review. She's shocked by what she reads. According to the report, the company lost nearly $20 million over the last few months alone. That really doesn't make sense. Livent posted a profit in the first quarter of the year. Maria's confused, but waits until Gordon gets back to talk with him about it. She doesn't really want to talk to Gordon because he's a nightmare to work for. He's arrogant and abusive and even threw a clock at Maria during one of his outbursts. He also relentlessly hits on her. He makes inappropriate comments and sends her flowers even after she asks him not to, and he has a habit of arranging for them to be seated next to each other at the company's shows. Gordon and Garth have also seemingly made a point of shutting Maria out of the financial reporting process. She isn't even invited to executive meetings. But when Gordon gets back from vacation, Maria notices that all of a sudden, instead of showing millions in losses, the latest financial reports show the company has made more than $7 million. So Maria goes to Gordon's office to confront him, but when she asks him what's going on, he puts his feet up on his desk, folds his arms behind his head and tells her it's just income smoothing. Everyone does it. Maria asks if Garth knows about the shifting numbers and Gordon tells her, where do you think this comes from?

[Slachi Cole]

Income smoothing is what I call it when I steal money. I am simply Smoothing my income and also someone else's.

[Sarah Hackey]

It is a term I have never heard before, so I love it.

[Slachi Cole]

It's one I'm going to use.

[Sarah Hackey]

Well, Maria tells Gordon, now that she knows they're lying, there's no way she can go to an upcoming meeting with an auditor. Gordon erupts. He tells her she has to be there and to quote, shut the fuck up. While other executives pass off the fake financial statements as if they're real. Maria later says she's too terrified to do anything about what she's learned. She may feel like she has no choice but to go along with it because Livent is taking significant financial risks. Garth has already launched a brand new musical in Los Angeles and has plans to take it to Broadway too. The show is Ragtime. It's big and complicated. The LA production alone costs $10 million. Plus in this case, Livent doesn't own the theater. So they need to sell a minimum of half a million dollars in tickets a week or the theater can kick them out. The future of the show and their company is on the line. If they get evicted from la, the bad press will tank the show before it ever gets to Broadway and they'll never recoup their investment. So Maria starts knowingly cooking the books.

[Slachi Cole]

Okay, so she didn't know. Now they tell her. And so she's like, I know, I'm gonna help them with the fraud. Incredible work across the board.

[Sarah Hackey]

Also, usually I feel like with our stories like this, the accountant who finds out everything's a lie is usually the hero.

[Slachi Cole]

Yeah, we'll see.

[Sarah Hackey]

Well, meanwhile, Garth is going even further with his scams. He gets colleagues to buy tickets to Ragtime, then reimburses them whether they see the show or not. One of Garth's employees buys almost $400,000 worth of tickets with his personal credit card and checkbook and Livent pays him back, claiming that money is repayment for non existent services. The scheme works and Livevent scrapes by in la. But Ragtime's ticket worries will only intensify when it moves to Broadway. It's set to open in a few months at a theater that Livent is renovating in Manhattan, the Ford center for the Performing Arts. Because it's Garth, the pre show renovations cost more than $22 million. The theater will seat more than 1,800 and Garth claims it will have the biggest stage, backstage area and orchestra pit on Broadway. The expenses of Ragtime and the renovations are putting Livent in a tighter squeeze than ever before. Maria begs Livent executives to come clean in the year end reports and post losses that reflect reality. But it turns out Garth is calling in help from sources with deep pockets. In February 1998, Michael Ovitz is sitting down for a meeting in New York with Garth. Michael is in his 50s and he looks kind of like Nathan Lane. Brown hair, thin glasses and a sweet hangdog look. But Michael is a Hollywood shark. He co founded CAA, the talent agency, and in the 80s was often called the most powerful man in Hollywood. A couple years ago, he surprised everyone by leaving CAA to become the president of the Walt Disney Company, working with one of his close friends, Disney Chairman Michael Eisner. But their relationship went south and Michael left that job just over a year later. Michael's now in the midst of a professional transition. He just sailed out of Disney with a $200 million golden parachute. So he's looking to invest a little money and if he can stick it to Eisner, his number one frenemy, that's why he's talking to Garth. Garth describes Livent's unique business model and talks up the company's widely respected output. At this point, they've earned more than a dozen Tony Awards. But Michael's ears perk up when Garth describes the newly renovated Ford center for the Performing Arts. That theater just happens to be on 42nd street across from the New Amsterdam Theater, which is owned by Disney. Garth offers him the chance to buy a controlling stake in Livent for $20 million and the chance to face off with Eisner. From across the street. Michael shakes Garth's. He's in.

[Slachi Cole]

This feels like one of those moments you think about later and you're like, I shouldn't have done that.

[Sarah Hackey]

Yeah, I feel like this is the downside of being fueled by spite. And unfortunately for Michael, things at Livent get off to a bad start. Just two months later, Ragtime loses a Tony for best Musical to Disney's the Lion King. That's when Garth feels his stomach drop while sitting in the audience at the awards show. It's a missed opportunity to get enormous free advertising to boost Ragtime's ticket sales. And even worse for Michael, it's a missed chance to claim victory over Eisner. Then, just a few days after the Tony Awards, Michael's team officially assumes management control of Livent. As part of the deal, Michael insisted on appointing his own management team. Garth is able to stay on as chief creative director and Vice chairman, but Michael's team will handle day to day operations. And when they take over, they find Out. Livent's finances are a mess. Michael hires an auditing firm to look over everything. But Livent's accountants evade questions and refuse to cooperate. Michael confronts Garth, but Garth chalks it up to minor accounting irregularities. Then, in August, a group of Livent accountants come forward, led by Maria, the cfo. They're terrified of being found out and possibly serving jail time if regulators get involved. They give Michael and his team the other set of books. The real books reveal what Michael suspected. That he just paid a lot of money for a company in immense debt with very questionable financial practices. He's going to lose his entire investment. To try and save his own neck, Michael turns everything over to the authorities. The next week, Michael suspends Garth from his own company. He has security escort Garth from the Toronto office and changes the locks. The next day, both the US And Canadian stock exchanges suspend trading of Livent stock. Three months later, Livent declares bankruptcy, and Michael releases the company's real financial statements to the public. After stock trading resumes, Livent's shares plummet 95%, and the company loses $100 million before trading is suspended again. And in January 1999, the SEC sues Garth and Livent for securities fraud. The U.S. attorney for the Southern District of New York also charges Garth and other livent executives with 16 felony counts for violating federal securities laws. But Garth flees to Canada before before he can be arrested. Despite the financial disaster Garth created under his leadership, livent has received 19 Tony Awards, built and restored theaters all across North America, and claims it will generate 25% of all North American commercial theater receipts by the end of the year. But none of it is enough to keep Garth out of prison. In Canada, the wheels of justice spin slowly. After Garth fled the U.S. it took more than three years for the Canadian government to file charges against him. And then it took another six years for his trial to even begin. All the while, Garth kept working. Despite the charges against him, Canadians were still eager to work with the beloved visionary who put the country's theater scene on the map. Garth produced live events, a Christian film, and CFL halftime shows. He was also a producer and judge on a CBC reality show called Triple Sensation, where he looked for kids who can see, sing, dance, and act. But in March 2009, Garth is finally found guilty of fraud and forgery. Plus, he's barred from ever being involved in the finances of a Canadian theater production. A few months later, he's sentenced to seven years in prison. Garth appeals and loses, but he manages to get his sentence reduced to five years the trial publicly uncovers the extent of Livent's fraud. Like at one point, Livent's accountants made a loss of $41 million look like a profit of $14 million. Garth's brazenness is almost impressive. Saatchi, will you read what the judge said during sentencing? Yeah.

[Slachi Cole]

The judge said the exponential growth of the company was analogous to an athlete taking a performance enhancing drug. The result may be spectacular, but the means involve cheating.

[Sarah Hackey]

Oof.

[Slachi Cole]

Reminds me of another scanflancer named Lance Armstrong.

[Sarah Hackey]

Yeah, it is truly full circle here. But Garth isn't willing to let a criminal conviction stop him from producing theater while he's locked up. Garth becomes obsessed with the idea of turning an old movie into a musical. It's called Madame Swusotska, and it's about the relationship between a music teacher and her prodigy piano student who escaped apartheid South Africa. Garth works on adapting the story from his jail cell. Then he's granted parole after serving just 17 months. At this point, Garth's in his early 60s. He's a free man, and he's ready to start rehearsals on his first post conviction show. Garth isn't legally allowed to be involved in a production's finances in Canada, but he can be involved on the creative side, and his friends are happy to work with him. Again, fraud be damned. Here's what Adrian Noble told CBC News. He's the director of Madame.

[Slachi Cole]

He was found guilty, he went to prison, he did his time and he came out and he's getting on with it.

[Sarah Hackey]

There was never any, ever any question.

[Slachi Cole]

Whether or not he was a brilliant producer or not. That was never, ever, ever a question. Listen, maybe he had good taste, but the thing is, being a producer is not like being an actor or a writer on a project. You have to be involved in the money side of it. You have to wear both hats. And so you can't be a brilliant producer if you're also stealing money from the production.

[Sarah Hackey]

Exactly. And even though he's maybe not a good producer. In March 2017, six years after his conviction, Garth makes his theatrical comeback. The new musical Szotska opens in Toronto in classic Garth fashion. The cast is huge and the production is extravagant and expensive, but it's a total flop. Critics panned the show because of its overly complicated plot and tone deaf portrayal of South African apartheid. Now Garth is exiled from America and a bust in Canada. But just when it seems like his luck has finally run out, the American courts drop the charges against him, saying his time in prison in Canada is enough. He's free to return to the US So Garth sets out to stage a Broadway comeback like the theater world has never seen. All he has to do is create a new show that's a smash hit, prove that he really is the greatest showman, and everyone will love him again. Unexpected expenses that pop up, especially during the holidays, are truly the worst. Life doesn't wait for payday.

[Slachi Cole]

You got that right. But luckily there's Chime, the financial app that's changing the game. With Chime's My Pay feature, you can get up to $500 of your paycheck early. No credit check, no interest, and no mandatory fees. Plus, you'll get access to over 50,000 fee free ATMs. That's incredibly convenient, especially if you're traveling.

[Sarah Hackey]

Don't wait for payday to make this holiday season merry and bright. Open your Chime checking account in [e-mail] scampod that's chime.com scampod Chime feels like.

[Slachi Cole]

Progress Banking services and debit card provided by the Bancorp Bank N A or Stride Bank N A My pay line of credit provided by the Bancorp Bank N A or Stride Bank N A MyPay eligibility requirements apply. Not available in all states. MyPay credit limits range $20 to $500. A $2 fee to get funds instantly. SpotMe eligibility requirements and overdraft limits apply. Fees apply at out of network ATMs and for OTC withdrawals.

[Sarah Hackey]

I feel like a it's 2017, and Susie Medack walks the halls of California's Berkeley Repertory Theater, mulling over a major dilemma. Suzy has a gray pixie cut and decades of theater experience, mostly as Berkeley Rep's managing director, and Garth Strabinski recently came to them with a proposal to host the world premiere of his new musical, Paradise Square. The question Suzy's wrestling with is should Berkeley Rep work with him? He's a convicted criminal and his shows are historically way too expensive. This one would require a cast of 32 and an eight person band, which would be the most expensive show Berkeley Rep has ever done by far. But the show is interesting and ambitious. Paradise Square is about the Five Points neighborhood of Lower Manhattan and how it met its tragic end during the draft riots of 1863. The neighborhood was home to both Irish immigrants and freed black Americans, and the musical has real tough conversations about race. Plus, Garth made Susie an offer she can't turn down. He says he'll spend $3 million of his own money on the production.

[Slachi Cole]

Is it actually his own money? Did he Take it from an old lady somewhere. Did he rob a bank?

[Sarah Hackey]

Well, Suzy knows that she and the theater leadership need to think long and hard about Garth's proposal and how much they can trust him. Everything would have to be in writing. Garth clearly has his own motivation for making this work. The show would be a triumphant return. And if he fails, he'd almost certainly be out of chances to produce theater in the U.S. eventually, Suzy and her partners at Berkeley Rep decide to move forward with Paradise Square. Saatchi, will you read what she later told the New York Times?

[Slachi Cole]

She said, we took the position that in an enlightened society, when somebody does something wrong, you want to think that after they pay their dues, they can be resurrected.

[Sarah Hackey]

In.

[Slachi Cole]

In society. Yeah. Sarah. I mean, this is why you and I don't like jails.

[Sarah Hackey]

Cause we don't really think they work. I mean, it also is interesting who gets the chance to repay their dues to society and who's trusted to.

[Slachi Cole]

Yes. How many chances? How many dollars worth of chances are you willing to give somebody? I certainly wouldn't do this twice.

[Sarah Hackey]

No. But. In January 2019, six months after the US charges are dropped against Garth, Berkeley Rep premieres Paradise Square. It gets mixed reviews, but audiences seem to like it, and its run is extended by popular demand for two more months. That's just enough buzz for the show to make the move to Broadway. Garth may have eked his way into a second chance, but he's about to find out if Paradise Square will erase his past mistakes and give his career new life, or if it will end up being paradise lost. It's October 2021, and Joaquina Kalukango is in a rehearsal room in Chicago preparing for a pre Broadway production of Paradise Square. After a long delay because of the pandemic, the cast has recently begun rehearsals ahead of its opening next spring. Joaquina is a young black actress with a powerful singing voice and a strong resume. She's coming off her first Tony nomination for Best Actress in a play, but this is her first time originating a leading role on Broadway. It's a big deal for her. The show's producer, Garth Drabinski, has called the company in for an important discussion. He wants to talk about the racial implications of a show that features interracial couples during the Civil War. But as Garth tells a group about how important the show's message is, he veers off into a tangent about why he left the N word in another one of his plays, a revival of Showboat. But Garth doesn't say the N word. He says the whole word.

[Slachi Cole]

Sarah, this might be controversial, but I don't think anybody named Garth should say that word.

[Sarah Hackey]

I think you're right.

[Slachi Cole]

Listen, if there are any black Garths out there, please email us. Maybe we're wrong, but I don't think a Garth can say the N word.

[Sarah Hackey]

No. And after Garth's speech, Joaquina's union, Actors Equity, sends a letter asking for Garth to be removed from the production, but he refuses. He doesn't seem to care that he's coming across as old, tone deaf and offensive. Joaquina puts the tension aside and focuses on her leading role. But when Paradise Square opens in Chicago, it gets middling reviews and has poor ticket sales. And a lot of this is due to Garth. With his overbearing presence and constant rewrites, he's exhausting the actors and crew. Everyone hoped the Chicago premiere would build hype for its upcoming Broadway run, but now it's clear the musical needs major tweaking. It's becoming obvious that the musical is in trouble, but for Joaquina, the musical is bigger than a paycheck. This is her big starring moment, so she stays with the show. In April, Paradise Square officially opens on Broadway. Joaquina is overjoyed. As she tells a red carpet reporter at the premiere, I feel overwhelmed. There was so much love in that space and to have all of those people that love us support us like that.

[Slachi Cole]

There's no greater feeling than that.

[Sarah Hackey]

Reviews for the show aren't completely positive, but they are glowing toward Joaquina. The show still manages to get 10 Tony nominations, and Garth and his team have high hopes this will boost ticket sales. Joaquina is asked to perform live at the Tonys, and when she gets up on stage, she absolutely kills it. She sings her big Act 1 number, let it Burn. Hey, let it burn. Joaquina goes on to win the Tony for Best Lead Actress in a musical, the show's only winner. She celebrates and parties all night and doesn't even go to bed until 10pm the next day. At her first post Tony's performance of Paradise Square, Joaquina gets a two minute standing ovation when she walks on stage for the first time. But none of this is enough to save the show. Paradise Square announces it will close on July 17, 2022, after less than six months, Joaquina and the cast agree to stay on until the end, even though it's unclear if the show will run out of money by then. The production's directors and choreographers have already filed complaints about missed payments, and the unions are asking questions soon. Actors Equity comes after the producing team for roughly $200,000 in missed payments. The show simply can't afford its own budget, and there is no larger company's cash flow to save Garth this time. Then, three days before the show closes, Actors Equity announces they're putting Garth on their do not work Listen. It's a lifelong ban, and it effectively ends Garth's career in the arts. Saatchi, will you read what the actors wrote to their union about Garth?

[Slachi Cole]

They wrote, garth has withheld benefits and pay from many members and has created an unsafe, toxic, and frequently hostile work environment. When presented with these concerns from the company, Garth has continually been dismissive, defensive, and often abusive. As has been said about Garth, every day there is a new way to disrespect someone, and today is no different. Yeah, you can't be a good producer if you're a piece of shit.

[Sarah Hackey]

Yes. And if you're driven entirely by your own ego and do not give a shit about how anyone's getting paid. But Garth is still absorbing the news. When Paradise Square closes on Broadway a few days later, the producers don't come close to recouping their $15 million investment. Garth tries to sue Actors Equity, seeking $50 million in damages for defamation and added antitrust claims. He argues that because he wasn't head producer on Paradise Square and his name wasn't on the show's paychecks, he can't be liable for the producers not paying. But the union doesn't buy this. It's clear that Garth was running the show. Garth tries his best, but after all his lies and exploits, his lawsuits against Equity are thrown out. But Garth still won't stop fighting. He appeals, but as of August 2020, Garth's appeal was dismissed. Garth is still arguing against his ban, determined to return to the entertainment industry. Saatchi. I feel like the scam hit really close to home in many ways. One, funding in the arts, and two, a real Canadian scammer.

[Slachi Cole]

Do you know how few producers of live shows there are in Canada? And this is the guy who got to do it twice. It's outrageous what he got away with. It's outrageous.

[Sarah Hackey]

It 100% has to do with Canada's little sibling thing with the US where it's like, look, see, we can do it, too. And maybe it's Garth doing it, but look, we could still have a big show.

[Slachi Cole]

Yeah, I mean, it's interesting, too. It feels a little bit like he got emboldened by early success with Cineplex, which wasn't really reinventing the Wheel. They were just like, hey, what if we make the movie theaters super cute and even like, the plays that he wants to put on are adaptations. And there's just very little that's unique here. This is one of my least favorite Canadian scammers. I can't believe I'm saying that.

[Sarah Hackey]

This, like, really pissed me off in many ways. He gets caught with a scam and everything, and then he gets a whole other chance. The first time he gets caught and flees to Canada. He has a job being a judge on cbc, which maybe isn't like the coolest thing for him. It's still like a job he. Despite being a literal scammer.

[Slachi Cole]

Yeah, I guess. Sarah, the thing to learn is that if you're gonna scam, then you need to do it under a role that people don't understand. Like, no one knows what a producer does. That's what I've learned.

[Sarah Hackey]

Yeah. I mean, also the role of a producer can vary between different productions and forms of art. So I think, yeah, no one really 100% knows what a producer does. I just know that they aren't really supposed to do what Garth did. Maybe don't trust producers unless they're podcast producers.

[Slachi Cole]

Yeah, only trust the little wieners who work in radio like us. If you like scams, you can listen to every episode early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short [e-mail] survey.

[Sarah Hackey]

This is there's no business like scam business. I'm Sarah Hackey.

[Slachi Cole]

And I'm Sachi Cole. If you have a tip for us on a story that you think we should cover, please email [e-mail] we use many sources in our research. A few that were particularly helpful were A Producer Seeks a Broadway Comeback by Richard Zodiac for the New York Times. As if We Never Said Goodbye by Mark Herzberg for Forbes. Peter Smalls is reporting for the Toronto Star and Garth Drabinski's memoir Closer to the Sun.

[Sarah Hackey]

Rachel Borders wrote this episode. Additional writing by us Sachi Cole and Sarah Hagee. Olivia Briley and Eric Thurm are our story editors. Back checking by Meredith Clark. Sound design by James Morgan. Additional audio assistance provided by Adrian Tapia. Our music supervisor is Scott Velasquez. For Freeson. Our managing producers are Matt Gantt and Desi Blaylock. Janine Cornelo and Stephanie Jens are our development producers. Our associate producers are Charlotte Miller and Lexi Peery. Our producers are John Reed, Yasmine Ward and Kate Young. Our senior producers are Sarah Enny and Ginny Bloom. Our executive producers are Jenny Lauer, Beckman, Marsha Louie and Erin O'Flaherty. For wonder.

[Slachi Cole]

My name is Graham Isidore.

[Sarah Hackey]

I have a progressive eye disease called keratoconus.

[Slachi Cole]

Admitting I'm losing my vision has been.

[Sarah Hackey]

Hard, but explaining it to other people has been harder. Lately, I've been trying to talk about it.

[Slachi Cole]

Short Sighted is an attempt to explain what vision loss feels like by exploring how it sounds. By sharing my story, we get into all the things you don't see about hidden disabilities.

[Sarah Hackey]

Short sighted from CBC's personally available now.