Alexa
  • Directory of Taiwan

Former CFO who helped with probe asks for no jail time in Cendant case

Former CFO who helped with probe asks for no jail time in Cendant case

A former chief financial officer is asking to be spared prison time, saying his extraordinary cooperation with authorities investigating Cendant Corp. was crucial in proving the largest accounting fraud of the 1990s.
Cosmo Corigliano, who is scheduled to be sentenced Tuesday for fraud, says he gave authorities an inside account of how the multibillion-dollar accounting fraud was conceived, directed and discussed among executives. His testimony over three trials led to the conviction of former Cendant Corp. Chairman Walter Forbes and earlier of Vice Chairman E. Kirk Shelton.
"Indeed, we are aware of few if any cooperating witnesses who have ever provided greater assistance to the United States government in a corporate fraud case," his attorneys wrote in court papers filed this week.
They quote a letter from former FBI agent Mark Gerber, the original lead case agent: "We needed someone on the inside who was in the meetings when the fraud was discussed to step forward and cooperate and tell the story and bring the documents to life."
Prosecutors have not yet filed their response.
Forbes was sentenced to 12 years and seven months in prison, while Shelton received a 10-year sentence. Both men were ordered to pay $3.275 billion (euro2.54 billion) in restitution.
Prosecutors say the scheme inflated the stock of Cendant's predecessor, CUC International, by $500 million (euro388 million).
The fraud cost the travel and real estate company and its investors more than $3 billion (euro2.33 billion). The fraud was reported in 1998, causing Cendant's market value to drop by $14 billion in one day and leaving a trail of 119,000 victims.
The Cendant case was among the first in a series of corporate accounting scandals that sparked outrage from investors in recent years.
Corigliano, former chief financial officer at CUC, testified that for years he drew up what he called "cheat sheets" to falsify profits.
Corigliano faces between 6 1/2 to slightly more than eight years in prison under sentencing guidelines. But his attorneys are asking for probation with home confinement and community service.
Forbes was chief executive officer of CUC and Shelton was president before the membership marketing operation merged with travel and real-estate services company HFS Inc. to form New York-based Cendant in December 1997. Cendant's brands included Ramada, Howard Johnson, Avis, Coldwell Banker and Century 21.
In September, Cendant stockholders changed the company's name to Avis Budget Group to reflect its Avis and Budget vehicle rental brands. Its real estate and hotel businesses were spun off as stand-alone companies and the company sold its travel distribution operations.


Updated : 2021-07-29 18:18 GMT+08:00