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Ex-chairman convicted of Cendant fraud scheme

NEW HAVEN -- A federal jury yesterday found former Cendant Corp. chairman Walter Forbes guilty of conspiracy to commit securities fraud and two counts of making false statements in a massive fraud scheme that cost the travel and real estate company and its investors more than $3 billion.

He was found not guilty of a fourth count, securities fraud.

The case was being tried after two previous juries deadlocked. Jurors reached the verdict after nearly three days of deliberations.

The Cendant case was among the first in a series of corporate accounting scandals that sparked outrage from investors in recent years.

The fraud caused the company's market value to drop $14 billion in one day in 1998.

"We are gratified by today's verdict," said New Jersey US Attorney Christopher J. Christie. "The innocent victims of this $14 billion fraud engineered by Walter Forbes have waited a very long time for justice to be done. This is a great day for those who believe that everyone in our society must be held accountable for their conduct."

Prosecutors said they expect Forbes to appeal.

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