Risk Management

Former Cendant CFO Seeks Probation

Days before he is sentenced, Cosmo Corigliano, who testified against his former bosses, asks the court for leniency.
Stephen TaubJanuary 26, 2007

The former chief financial officer of Cendant is desperately trying to stay out of prison. Cosmo Corigliano, who is scheduled to be sentenced Tuesday for his role in the largest accounting fraud of the pre-Enron era, is asking the judge to sentence him to probation, home confinement, and community service, reasoning that he provided extraordinary cooperation to authorities investigating the company, according to the Associated Press.

Corigliano asserts that he provided detailed inside information on the company’s illegal activities and testified in three trials that ultimately led to the conviction of former Cendant chairman Walter Forbes and former vice chairman E. Kirk Shelton. “Indeed, we are aware of few if any cooperating witnesses who have ever provided greater assistance to the United States government in a corporate fraud case,” his attorneys wrote in recently filed court papers, reported the AP.

The court documents also quote from a letter from former FBI agent Mark Gerber, the original lead case agent, who asserted: “We needed someone on the inside who was in the meetings when the fraud was discussed to step forward and cooperate and tell the story and bring the documents to life,” said the AP.

Earlier this month, Forbes was sentenced to 12 years and seven months in prison and ordered to pay $3.3 billion in restitution for orchestrating the fraud. Shelton previously received 10 years in prison and was ordered to pay $3.3 billion. Corigliano faces between 6 1/2 and 8 years in prison under sentencing guidelines, according to the AP. Prosecutors have not yet filed their response to his request.

The fraud took place when Forbes was chief executive officer of CUC International, and came to light shortly after it merged with HFS Inc. to form Cendant Corp. in December 1997. According to reports, investors lost $19 billion when Cendant’s stock fell after the disclosure.

Corigliano served as controller of CUC from 1983 to 1995, and as its finance chief from 1995 until the merger. After that, he was an officer of Cendant Membership Services, the postmerger name for the former CUC business units, until his resignation from Cendant in April 1998.