Another Cendant Hung Jury
The retrial of Cendant Corp.’s Walter Forbes ended with another deadlocked jury, with panel members unable to reach a unanimous verdict on charges accusing the former chairman of leading a major accounting fraud in the 1990s.
U.S. District Judge Alvin Thompson declared a mistrial when the 11-member jury said it couldn’t agree on four counts after 27 days of deliberations in Hartford, Conn. In Forbes’ first trial, Thompson declared a hung jury in January 2005 after 33 days of deliberations.
Prosecutors must decide whether they will try him yet again. Forbes, 63, denies any wrongdoing.
“It’s very unusual for prosecutors to go after people a third time,” said John Fahy, a former federal prosecutor in New Jersey. “If the government can’t get a verdict after two trials, they know they have major problems with the case.”
Jurors divided on whether Forbes inflated income by $252 million at CUC International Inc., where he was chief executive. CUC merged with HFS Inc. in 1997 to form Cendant, the largest U.S. travel and real estate services company. Forbes testified at both trials, blaming the fraud on subordinates.
On Tuesday, Thompson dismissed one member of the panel for doing improper background research on the case. Thompson told jurors Thursday to resume deliberating with 11 members. About an hour later, the foreman sent a note saying they were deadlocked.
Forbes, asked whether he had any comment, said: “None at all.”
Michael Drewniak, a spokesman for U.S. Atty. Christopher Christie in Newark, N.J., whose office has pursued Forbes for eight years, had no comment on the possibility of a retrial.
Jurors at Forbes’ first trial convicted his top aide, former CUC President E. Kirk Shelton, who was sentenced to 10 years in prison. Three other CUC executives have pleaded guilty.
Forbes was charged with conspiracy, securities fraud and two counts of making false statements to the Securities and Exchange Commission.
Forbes told jurors that he knew nothing of the fraud and little about accounting. He said he left CUC’s daily operations to others and relied on CUC accountants and auditors at Ernst & Young.
Prosecutors said Forbes collected more than $100 million in pay from the company as he inflated revenue. He also got a $47.5-million severance package when he left Cendant in 1998.
