Former Cendant Exec. Sentenced in Fraud Case

By Katie Hauser

Published on January 17, 2007

Forbes was found guilty in October of conspiracy to commit securities fraud and two counts of making false statements. Forbes was not found guilty of one count of securities fraud.

It is alleged that Forbes and other Cendant executive officers inflated the stock of the company’s predecessor, CUC, by more than $500 million. When the scheme was uncovered in 1998, the company’s stock plummeted by $14 billion in a single day. It is reported that 119,000 investors were hurt by the scheme. Forbes denies any knowledge of the fraud.

Forbes’ attorney asked for a 10-year sentence, citing Forbes’ age and charitable contributions as reasons for the reduced sentence. However, prosecutors argued that the amount of money Forbes gave to charitable causeswas a relatively small percentage of his net worth.

Former Vice Chairman of Cendant, E. Kirk Shelton, was sentenced to 10 years in prison and a $3.27 billion fine for his role in the fraud. He is currently appealing his conviction.

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