TORONTO - The defence theory that two of North America's foremost theatre impresarios were somehow victims of an intricate conspiracy to frame them is simply absurd, the prosecution at the fraud trial of Livent founders Garth Drabinsky and Myron Gottlieb said Tuesday.

In final arguments, Crown lawyer Amanda Rubaszek said Drabinsky and Gottlieb were "desperately" trying to distance themselves from incriminating evidence by alleging a conspiracy.

Such a plot would have had to involve several people with nothing to gain from cheating and involve document tampering and document planting, she said.

"This is preposterous," Rubaszek said. "There is no evidentiary basis for this."

Drabinsky and Gottlieb have pleaded not guilty to bilking investors and banks out of as much as $500 million by fraudulently misstating their company's value.

The pair behind such popular hit productions as "Phantom of the Opera" and "Ragtime" initiated and directed the massive fraud over as many as eight years in the 1990s, the Crown argued.

Alternatively, it is "ridiculous" to suggest that Livent's former accountant, Gordon Eckstein, who pleaded guilty last year to one count of fraud, somehow cooked the books on his own without the knowledge of his bosses, Rubaszek said.

For one thing, she noted, Gottlieb was by his own description an "astute cash manager" who signed all the company's cheques.

The Crown alleges Drabinsky, 59, a member of the Order of Canada, and Gottlieb, 65, deliberately hid Livent's debts to make it more attractive to investors.

The company also supported the men's lavish lifestyles, which included use of a private jet and expensive cars, and the fraud was a "dishonest way to draw funds," Crown lawyer Alex Hrybinsky said.

In 1996, the flamboyant Drabinsky earned $480,000 in salary and another $1-million bonus. A year later, each man held Livent shares worth about $27 million.

Co-prosecutor Robert Hubbard reminded Ontario Superior Court Justice Mary Lou Benotto of a love letter Drabinsky wrote to his girlfriend, in which he talked about drowning in debts and his difficulties in extricating himself from them.

Drabinsky appeared to hang his head in embarrassment as the letter, addressed to "my dearest Karen," was displayed in court and Hubbard suggested it provided evidence of another motive for fraud.

Court had previously heard the book-cooking scheme was so elaborate that making and tracking falsified entries became a full-time job for one employee.

At another point, a loss position of $41 million magically became a $14-million profit after millions in advertising expenses disappeared from the books.

Livent ultimately went bust in 1998 when a new American management team, headed by Hollywood magnate Michael Ovitz, brought in auditors to examine the company's finances and senior executives blew the whistle.

Numerous documents provide overwhelming evidence of the fraud the men perpetrated even if the credibility of witnesses who testified against them could be called into question, Hrybinsky said.

"Publicly filed documents are supposed to be truthful; in this case, they were deliberately untruthful," Hrybinsky said.

"The accused initiated the scheme. They were involved in every facet."

The pair, who face a maximum of 14 years in prison, have been represented by ace criminal lawyers Edward and Brian Greenspan.

The defence begins its closing oral arguments on Wednesday.