Prosecutors revise indictment of ex-CA CEO Kumar

Prosecutors building the case against former Computer Associates CEO Sanjay Kumar have filed a superseding indictment adding more details of his alleged crimes.

As the government continues preparing its case against the accused ringleaders of Computer Associates International's (CA's) "35-day month" accounting fraud, prosecutors have filed a superseding indictment filling in more details of ex-Chief Executive Officer Sanjay Kumar's alleged crimes.

A number of former CA officials, including the company's ousted chief financial officer and general counsel, have pleaded guilty to charges connected to the fraud, which the company has confessed. The government is preparing to go to trial on charges against two of the alleged masterminds, Kumar and CA's former worldwide sales head, Stephen Richards. Both have pleaded not guilty.

In the revised indictment, the government piles on more evidence that Kumar and Richards knowingly distorted CA's accounting and took steps to hide their actions.

In early 2000, CA signed a US$44.5 million license deal with a "nearly insolvent" customer in which it also had an ownership stake, then backdated the contract so it could be recorded in the prior quarter, according to the indictment. The next quarter, expecting that it would not be able to collect on the contract, CA reversed the revenue in its internal records but did not publicly restate its results, the indictment says.

It also accuses Kumar of authorizing a US$3.7 million consulting contract in early 2003 that essentially amounted to hush money for an unnamed executive at a CA customer company who knew of CA's accounting improprieties. This executive had arranged a US$27 million license contract with CA in March 2000, but as part of the deal, CA spent a similar amount on software from the executive's company, according to the indictment. Neither software package was ever used, making the deal a "revenue swap" that cannot legally be treated as a sale. When the unidentified executive threatened to alert government investigators to the arrangement, Kumar conspired with CA's general counsel to arrange the consulting payoff, the indictment says.

The defense and prosecution are currently in the discovery period and are scheduled to meet with the case's presiding judge, Judge I. Leo Glasser of the U.S. District Court for the Eastern District of New York, in mid-July for a status conference.

Sentencing hearings for the CA executives who have pleaded guilty have been adjourned until after the trial against Kumar and Richards commences, because several of those executives are expected to testify at the trial, according to Assistant U.S. Attorney Eric Komitee.

CA reached a deferred prosecution agreement with the government in September, under which it agreed to pay US$225 million to a restitution fund to compensate victims of its fraud and to take various steps to strengthen its corporate governance and cooperate with government investigators. If after 18 months CA is deemed to have complied with its obligations, the U.S. Attorney's Office will seek to dismiss charges against the company.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stacy Cowley

IDG News Service
Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?