Third Cendant fraud trial opens today

HARTFORD -- Federal prosecutors are hoping that a third jury will be able to reach a verdict in the case of former Cendant Corp. chairman Walter Forbes, accused in a massive fraud scheme that cost the company and investors more than $3 billion.

A verdict could end what was, when it was brought, the largest case of accounting fraud in the country.

The third trial is expected to begin today before US District Judge Alan Nevas in Bridgeport.

Prosecutors say Forbes participated in a scheme to inflate the stock of Cendant's predecessor, CUC International, by $500 million. The fraud was reported in 1998, causing Cendant's market value to drop by $14 billion in one day.

Forbes has argued he knew nothing about the fraud. His co-defendant, former Cendant Vice Chairman E. Kirk Shelton, was convicted last year of conspiracy, mail fraud, wire fraud, securities fraud, and making false statements to the SEC.

Jurors in the first trial convicted Shelton but deadlocked on Forbes. A second trial a year later ended the same way after 27 days of deliberations, even though prosecutors reduced charges against Shelton from 16 to four.