Sixty-four-year-old former Cendant Corp. chairman Walter Forbes will not be spending his retirement years in a posh retirement community but instead in the cold confines of a jail cell. Forbes was sentenced Wednesday, Jan. 17, to 12 years and seven months in prison as well as required to pay $3.275 billion for his part in one of the largest corporate accounting scandals in history. Prosecutors say that Forbes
participated in a scheme to inflate the stock of Cendant's predecessor,
CUC International, by $500 million. The fraud was disclosed
on April 15, 1998,
causing Cendant's market value to drop by $14 billion that day.
Jurors convicted Forbes of conspiracy and two counts of
false reporting to the U.S. Securities and Exchange Commission.
Today, the company once known by the name Cendant no longer operates as a conglomerate and under a new name. The Parsippany, N.J.-based company went on to spin off its various businesses into four separate companies: its real estate unit became
Wyndham Worldwide Corp; its hotels division became
Realogy Corp.; and its car rentals unit became Avis Budget Group Inc. Meanwhile, Cendant sold its travel business, the
Travelport Inc., to the Blackstone Group for $4.3 billion on June 30, 2006. — Gerald Magpily
See Bloomberg article
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