Cendant exec loses appeal

Cendant exec loses appeal

	Published : Wed, 31 Jan 2007 23:51 By : Agencies Print this Story

NEW HAVEN, Conn. (AFX) - Former Cendant Corp. Vice Chairman E. Kirk Shelton was ordered to report to prison after losing an appeal of his conviction in a $3 billion accounting scandal at the travel and real estate company.

Shelton, who was sentenced in 2005 to 10 years in prison on conspiracy and fraud charges and ordered to pay $3.27 billion restitution to Cendant, was ordered Wednesday to report to prison Feb. 20.

Shelton, a Darien resident, has been under house arrest pending appeals of his convictions, which were upheld in November by the 2nd U.S. Circuit Court of Appeals in New York. The appeals court on Tuesday lifted a stay on Shelton reporting to prison, according to court records filed Wednesday.

A judge is recommending Shelton serve his time at a prison camp in Otisville, N.Y., but the federal Bureau of Prisons will decide.

Former Cendant Chairman Walter Forbes was sentenced to 12 years and seven months in prison and also ordered to pay $3.3 billion in restitution.

Three former executives who cooperated with the investigation were spared prison time this week.

Prosecutors said the fraud inflated revenue by $500 million at Cendant's predecessor, Stamford-based CUC International, to drive up the stock price. The fraud was reported in 1998, causing Cendant's market value to drop by $14 billion in one day.

The Cendant case was among the first in a series of corporate accounting scandals that sparked outrage from investors in recent years.

Forbes was chief executive officer of CUC and Shelton was president before the company merged with travel and real-estate services company HFS Inc. to form Cendant in December 1997. New York-based 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 standalone companies and the company sold its travel distribution operations.