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Cendent exec avoids prison time

By ASSOCIATED PRESS
Published January 30, 2007

BRIDGEPORT, Conn. - A former executive was spared prison time Monday for her role in a massive accounting scandal at Cendant Corp. that cost the company and its investors more than $3-billion.

Anne Pember, 47, who pleaded guilty to conspiracy in 2000, was sentenced to two years of probation and 200 hours of community service. Pember, who faced five years in prison under sentencing guidelines, apologized for her conduct.

Pember asked to be spared prison time, citing her extensive cooperation with federal investigators. Prosecutors agreed.

"I think your cooperation and your testimony was quite extraordinary," said Senior U.S. District Judge Alan H. Nevas.

Pember was controller at CUC International of Stamford, which merged with HFS Inc. of Parsippany, N.J., to create Cendant in December 1997. 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.

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.

[Last modified January 29, 2007, 23:27:17]