Anne Pember avoided jail time after she plead guilty to conspiracy in the Cendant accounting scandal. Pember, senior vice president of accounting for Cendant, was an instrumental figure in the fraud that cost Cendant over 3 billion dollars. She received 2 years probation and 200 hours of community service. There was no mention of restitution.
Ms. Pember was controller at CUC International of Stamford, which merged with HFS Inc. of Parsippany, N.J., to create Cendant in December 1997. Ms. Pember became Cendant’s senior vice president for accounting.
Prosecutors say the scheme inflated the stock value of CUC International, Cendant’s predecessor, by $500 million.
The fraud cost the travel and real estate company and its investors more than $3 billion. The fraud was reported in 1998, causing Cendant’s market value to drop by $14 billion in one day.
Ms. Pember and other defendants have said CUC’s quarterly earnings were inflated in the two years leading up to the merger through improper accounting methods, including underfunding a reserve, accelerating recognition of revenues, deferring expenses, and drawing money from a merger account to boost revenues.
Cosmo Corigliano, CUC’s former chief financial officer, is scheduled to be sentenced Tuesday. He also has asked to be spared prison time, citing his extensive cooperation in the investigation.
Former Cendant Corp. Chairman Walter Forbes was sentenced to 12 years and seven months, while Vice Chairman E. Kirk Shelton received a 10-year sentence. Both men were ordered to pay $3.275 billion in restitution. via WSJ.com.
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