When the ex- chairman of Cendant turned-convict claimed that his marriage had fallen apart after he was incarcerated, federal prosecutors thought he was trying to pull something over on them, like get out of paying $3.2 billion in restitution.
Govt. Could Get Billions From Forbes' Divorce Decree
A bill for $3 billion was enough to get the government involved in a New Canaan divorce
Former Cendant Corp. Chairman Walter Forbes arrives at the U.S. District Court in Bridgeport, Conn. Wednesday, Jan. 17, 2007, for a sentencing hearing. Feds want to block his divorce because he owes billions.
Tuesday, Nov 17, 2009 Updated at 9:13 AM PDT
Now, it looks like a Bridgeport court is agreeing with them.
Bridgeport Superior Court Judge Howard Owens issued a ruling Thursday ordering Walter Forbes' ex-wife, Caren, to transfer ownership of homes in Connecticut and Rhode Island back to him, plus half of the couple's jewelry and art collections.
This would allow the federal government and Cendant to attach liens to recover almost $3.3 billion to which the court says they are entitled.
Forbes, of New Canaan, was sentenced in January 2007 to 151 months in federal prison in what has been called the largest accounting fraud of the 1990s.
Prosecutors said, made up $252 million in earnings that Comp-U-Card International, a shopping club, never had. CUC is the company that joined with HFS in 1997 to create Cendant, USA Today reports.
When news of “accounting irregularities” came out, Cendant's stock plummeted 46 percent in one day in April 1998, costing shareholders $20 billion, the government said. Cendant eventually broke into four companies.
When Forbes was sentenced, he was also slapped with an order to pay $3.2 billion in restitution – the amount shareholders received in a settlement with Cendant and Ernst & Young in 1999, USA Today reports.
That $3.2 billion is why the government suddenly wants to add marital coach to its responsibilities.
Prosecutors say Forbes is trying to dodge the bill by having his wife of 27 years file for divorce in Bridgeport Superior Court.
Caren Forbes, who stood by her husband through the trial, filed for divorce in March, saying their marriage has broken down "irretrievably."
Federal prosecutors won the right to intervene, saying the timing of the split suggested they were trying to avoid paying the restitution. They noted that Walter Forbes sold the family's nearly $6 million, 11,000-square-foot New Canaan mansion to Caren Forbes for $10 in 1999.
According to the divorce ruling, Caren Forbes will transfer ownership of the New Canaan mansion back to her ex-husband so it can be attached by Cendant and the U.S. government.
She is also returning about 14 acres and a chalet-style house in Wascott, R.I.
She can keep a condominium and golf club membership in Vero Beach, Fla., a condominium in
New Canaan and half the couple's collection of jewelry and art. The other half is to be sold to help fulfill the restitution order.
Walter Forbes was ordered to pay $1 a year to his former wife in alimony.