Judge Allows Deposition Of Former Cendant Chairman
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NEW HAVEN, Conn. (AP) - A federal judge on Tuesday granted a request by prosecutors and Cendant Corp. to depose the company's imprisoned former chairman in an effort to collect $3.2 billion he was ordered to pay in restitution.
Walter Forbes was ordered to pay the money last year when he was sentenced to more than 12 years in prison in a massive accounting fraud scandal.
The U.S. government and Cendant filed a federal lawsuit last month against Forbes seeking at least $22 million in assets they say he tried to hide. The lawsuit alleges Forbes fraudulently transferred cash, securities and real estate to his wife and others to avoid creditors and the restitution order.
The move to depose Forbes came after the 2nd U.S. Circuit Court of Appeals in New York last year upheld Forbes' conviction on conspiracy to commit securities fraud and two counts of making false statements.
Prosecutors and the company want to question Forbes about his assets, saying a statement he submitted lacks sufficient detail. They also said they want to ask Forbes about transfers of assets.
Authorities said they want information about numerous pieces of art listed by Forbes, citing ``the sheer scope and prominence of the artists in his collection (including Warhol and Rauschenberg).''
Forbes, 65, opposed the request, saying he has already provided comprehensive information about his assets.
His attorneys also said Forbes cannot afford an appraiser to determine the value of his illiquid assets. They said he would assert his Fifth Amendment rights and decline to answer questions because prosecutors have suggested Forbes has engaged in inappropriate conduct involving his assets.
Prosecutors said Forbes does not need to hire an appraiser and that the Fifth Amendment does not protect a witness from testifying about a matter that would only involve civil wrongdoing.
The deposition will take place on or before Aug. 29 at the federal courthouse in Williamsport, Pa. Forbes is serving his sentence at the Allenwood Federal Correctional Complex in Pennsylvania.
A telephone message was left Tuesday for Forbes' attorney, Barry Simon.
Forbes, of New Canaan, was chief executive officer of CUC, Cendant's predecessor, before it merged with travel and real-estate services company HFS Inc. to form Cendant in December 1997. Cendant's brands included Ramada, Howard Johnson, Avis, Coldwell Banker and Century 21.
Cendant was based in New York, but the litigation has been in Connecticut because the CUC division was headquartered in Stamford at the time the fraud occurred.
Cendant stockholders changed the company's name in 2006 to Avis Budget Group to reflect its Avis and Budget vehicle rental brands. Its real estate and hotel businesses were spun off as stand-alone companies and the company sold its travel distribution operations.
(Copyright 2008 by The Associated Press. All Rights Reserved.) |
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