It Pays to Cooperate With the Feds

Email

Print

Share

January 30, 2007 3:59 PM

An executive, whose cooperation enabled the government to send the chairman and vice chairman of Cendant Corp. to federal prison in a cook-the-books corporate scandal that caused the company to lose $14 billion in value in one day, was sentenced to six months of house arrest today.

Cosmo Corigliano, 47, of Old Saybrook, Conn., the one-time Chief Financial Officer of one of Cendant's predecessor companies, was sentenced to three years probation and six months house arrest in a Connecticut federal court Tuesday despite being a "significant cog" in the scandal, according to the U.S. government.

His cooperation helped the government prosecute Cendant Chairman Walter Forbes and Vice Chairman E. Kirk Shelton. Forbes is serving 12 years and seven months in prison, and Shelton is serving ten years. Both are to make restitution of $3.275 billion, an amount roughly equivalent to what the company and its accounting firm paid to settle the shareholders' class action suit that resulted from the scandal.

"Corigliano was certainly a significant cog in the fraud," U.S. Attorney Chris Christie of New Jersey said. "But his cooperation was long-running, complete and essential in helping us convict the true  perpetrators of this colossal accounting fraud."

Cendant, a travel and real estate business, has rebounded from the scandal and conducts $18 billion in business each year.