NEW YORK — A federal appeals court yesterday upheld the conviction of former Cendant Corp. Vice Chairman E. Kirk Shelton, who was sentenced to 10 years in prison and ordered to pay full restitution for his role in a $3 billion accounting scandal at the travel and real estate company.

The 2nd U.S. Circuit Court of Appeals, in a six-page order, rejected Shelton's claims that he was unfairly convicted in January 2005 of 12 counts of conspiracy, mail fraud, wire fraud, securities fraud and making false statements to the U.S. Securities and Exchange Commission.

Last month, former Cendant Chairman Walter Forbes was convicted of conspiracy to commit securities fraud and two counts of making false statements in the massive fraud scheme. He is awaiting sentencing.

In September, Cendant stockholders changed the company's name to Avis Budget Group to reflect its Avis and Budget vehicle rental brands. Its real estate and hotel businesses were spun off as standalone companies, and the company sold its travel distribution operations.

Prosecutors said Shelton drove up the company's stock price by inflating revenue by $500 million at Cendant's predecessor, CUC International. The fraud was reported in 1998, causing Cendant's market value to plunge by $14 billion in one day.

The Cendant scandal foreshadowed the corporate accounting scandals that followed with the collapse of the Internet bubble in 2000. At the time, the $3 billion fraud was described by the government as largest case of accounting fraud in the country.

The appeals court said Shelton's conviction in a federal court in Hartford, Conn., was supported in part by evidence that Shelton looked the other way when there were signs of fraud at the company.

It cited trial testimony that when Shelton was reviewing with a co-conspirator a document which stated that "reserves are being managed to meet quarterly targets," Shelton tore it up and said, "I guess I never saw that document."

The appeals court also noted other testimony that he avoided discussions of fraud, including a failure by Shelton to ask any questions of a co-conspirator who listed for Shelton and Forbes some of the accounting frauds they needed to worry about.

"We think from this evidence and more, the jury could fairly conclude that at the very least, if Shelton did not have actual knowledge, he was aware of a high likelihood that accounting fraud was occurring and deliberately avoided confirming that fact," the court said.

A message for comment left with Shelton's lawyer was not immediately returned.

Cendant was based in New York, but the trials were in Connecticut because the CUC division was headquartered in Stamford at the time the fraud occurred. The case was prosecuted by the New Jersey U.S. attorney's office because HFS was headquartered in Parsippany.