US: Ex-Cendant Executive Gets 10 Years in Prison
Former Cendant Corporation Vice Chairman E. Kirk Shelton was sentenced Wednesday to 10 years
in prison for his role in an accounting scandal that cost investors
more than $3 billion.
U.S. District Judge Alvin Thompson in Hartford also
ordered Mr. Shelton to pay almost $3.3 billion in restitution,
including an initial payment of $15 million by October, and monthly
payments of $2,000 per month once he is out of prison.
Mr. Shelton, 50 years old, was convicted Jan. 4 of 12
counts of conspiracy, mail fraud, wire fraud, securities fraud and
making false statements to the U.S. Securities and Exchange Commission.
Prosecutors said Mr. 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 Cendant's market
value to drop by $14 billion in one day.
The allegations of fraud at Cendant 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.
Lawyers for the U.S. attorney's office in Newark,
N.J., which prosecuted Shelton and others in the case, said he showed
no remorse for his actions.
Mr. Shelton's lawyer, Thomas Puccio, said he will
appeal. He has said the businessman's case is atypical because Mr.
Shelton didn't directly benefit from the scheme. He, like the Cendant
stockholders, lost millions of dollars. Mr. Shelton was ordered to
surrender to the U.S. Bureau of Prisons by Sept. 2.
- 186 Financial Services, Insurance and Banking