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US: Jury Asks Judge for Aid in Cendant Trial
Jurors considering the fate of former Cendant Corp. Chairman Walter Forbes asked a federal judge for assistance Thursday after being unable to reach a verdict during their 12th day of deliberations in his accounting fraud trial.
Forbes, whose first trial ended last year in a mistrial because jurors couldn't reach a verdict, is accused of participating in a scheme that cost the company and investors more than $3 billion. He faces four charges -- conspiracy to commit securities fraud, securities fraud and two counts of false reporting to the U.S. Securities and Exchange Commission.
U.S. District Judge Alvin Thompson recessed the court until Thursday afternoon to decide if he would give jurors additional instructions.
In his first trial, Forbes faced 16 counts of conspiracy, securities fraud, mail fraud, wire fraud, lying to the SEC and insider trading.
Forbes had claimed he didn't know about the fraud.
That jury convicted Forbes' co-defendant, Cendant Vice Chairman E. Kirk Shelton, of conspiracy, mail fraud, wire fraud, securities fraud and making false statements to the SEC.
Shelton was sentenced to 10 years in prison and ordered to pay $3.27 billion restitution to Cendant, including a balloon payment of $15 million and monthly installments of $2,000 after he is released from prison.
Prosecutors said Shelton inflated revenue by $500 million at Cendant's predecessor, CUC International, to drive up the stock price. The fraud was reported in 1998, causing its market value to drop by $14 billion in one day.
CUC, which ran a membership marketing operation, merged with HFS Inc., a travel and real-estate services company, to form Cendant. Its brands include Ramada, Howard Johnson, Avis, Coldwell Banker and Century 21.
The Cendant allegations were among the first in corporate accounting scandals in recent years that sparked outrage from investors. At the time, the $3 billion fraud was the largest case of accounting fraud in the country, prosecutors said.
Forbes was chief executive officer of CUC and Shelton was president before CUC merged with HFS Inc. to form New York-based Cendant in December 1997.
Four other former executives have already pleaded guilty in the scandal and have been cooperating witnesses.
Forbes trial started Oct. 17 and went to jurors Dec. 8.
Forbes, whose first trial ended last year in a mistrial because jurors couldn't reach a verdict, is accused of participating in a scheme that cost the company and investors more than $3 billion. He faces four charges -- conspiracy to commit securities fraud, securities fraud and two counts of false reporting to the U.S. Securities and Exchange Commission.
U.S. District Judge Alvin Thompson recessed the court until Thursday afternoon to decide if he would give jurors additional instructions.
In his first trial, Forbes faced 16 counts of conspiracy, securities fraud, mail fraud, wire fraud, lying to the SEC and insider trading.
Forbes had claimed he didn't know about the fraud.
That jury convicted Forbes' co-defendant, Cendant Vice Chairman E. Kirk Shelton, of conspiracy, mail fraud, wire fraud, securities fraud and making false statements to the SEC.
Shelton was sentenced to 10 years in prison and ordered to pay $3.27 billion restitution to Cendant, including a balloon payment of $15 million and monthly installments of $2,000 after he is released from prison.
Prosecutors said Shelton inflated revenue by $500 million at Cendant's predecessor, CUC International, to drive up the stock price. The fraud was reported in 1998, causing its market value to drop by $14 billion in one day.
CUC, which ran a membership marketing operation, merged with HFS Inc., a travel and real-estate services company, to form Cendant. Its brands include Ramada, Howard Johnson, Avis, Coldwell Banker and Century 21.
The Cendant allegations were among the first in corporate accounting scandals in recent years that sparked outrage from investors. At the time, the $3 billion fraud was the largest case of accounting fraud in the country, prosecutors said.
Forbes was chief executive officer of CUC and Shelton was president before CUC merged with HFS Inc. to form New York-based Cendant in December 1997.
Four other former executives have already pleaded guilty in the scandal and have been cooperating witnesses.
Forbes trial started Oct. 17 and went to jurors Dec. 8.
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