[JURIST] Walter Forbes, former Chairman of Cendant Corp. [official website], the huge New York-based company that owns Ramada, Howard Johnson, Avis, Coldwell Banker and Century 21, was sentenced Wednesday to 12 years and seven months in prison pursuant to a October 2006 conviction [US DOJ press release] arising from a multi-billion dollar accounting fraud in the 1990s. Forbes was found guilty of conspiracy to commit securities fraud and two counts of making false statements in the corporate scandal which affected at least 119,000 employees and investors and which cost the company more than $3 billion. He was ordered to pay $3.275 billion [AP report] in restitution and to serve 12 years and 7 months in prison.
According to prosecutors, Forbes and co-defendant ex-Cendant Vice Chairman E. Kirk Shelton inflated the company's stock value by $500 million and after the fraud was discovered in 1998, the company's value dropped by more than $14 billion in less than 24 hours. Forbes denied that he was aware of the fraud and had asked for leniency based on his age and his community work over the years. Cendant recently changed its name to Avis Budget Group [corporate website]. AP has more.