Business

Friday June 19, 2009

Prosecutors: Wife filing for divorce to avoid paying billions in taxes


BRIDGEPORT, Connecticut: The wife of the man responsible for the largest accounting fraud of the 1990s has filed for divorce - but federal prosecutors say the timing suggests that they're trying to avoid paying billions of dollars in penalties, not that their marriage is on the rocks.

Prosecutors note that former Cendant Corp. chairman Walter Forbes sold the family's nearly $6 million, 11,000-square-foot (1,000 square meter), seven-bedroom mansion to his wife, Caren, for $10 in 1999.

Caren Forbes, who filed for divorce in Bridgeport Superior Court in January and says their marriage of 27 years is "irretrievably" broken, wants the court to transfer the property, which is subject to liquidation, into her name, prosecutors said.

Forbes was sentenced in 2007 to more than 12 years in prison and ordered to pay restitution for his role in a fraud scheme that cost the travel and real estate company and its investors more than $3 billion.

Prosecutors, who have accused Forbes of hiding some assets to avoid paying the $3.275 billion penalty, say the divorce filing is a ploy and have asked to intervene.

"The timing of this filing suggests its purpose is to frustrate the enforcement of the court ordered restitution," prosecutors wrote.

William Champlin, Caren Forbes' attorney, called the government's claims "ridiculous." Robert Fried, Walter Forbes' attorney, also denied the accusations. - AP


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