Former Cendant Chairman Sentenced For Fraud
Prosecutors say that Forbes participated in a scheme to inflate the stock of Cendant's predecessor, CUC International, by $500 million. The fraud was reported in 1998, causing Cendant's market value to drop by $14 billion in one day. Prosecutors said Wednesday that there were 119,000 victims.
Forbes, who testified during the trial, has argued he knew nothing about the fraud. Forbes was CEO of CUC 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.