Third trial begins for former Cendant exec

0 Comments | USA TODAY, October, 2006 | by Greg Farrell

BRIDGEPORT, Conn. -- For the third time in the past two years, prosecutors on Tuesday accused former Cendant chairman Walter Forbes of masterminding an accounting fraud that inflated his company's earnings by $252 million. The disclosure of the fraud in April 1998 caused Cendant's share price to plummet 50%, wiping out $14 billion in shareholder value in one day, making it one of the biggest accounting frauds of the 1990s.

In a scene reminiscent of the movie Groundhog Day, the government argued that Forbes, 63, founder of Comp-U-Card International, used CUC's merger-and-acquisition reserves as a slush fund through which his underlings padded the company's earnings. The government has already put Forbes on trial twice for his alleged actions. In a trial that began two years...