Sanjay Kumar, former CEO of Computer Associates, gets 12 years and $8 million fine for fraud
By Our Corporate Bureau | 03 Nov 2006
Mumbai: A Brooklyn federal court has sentenced Sanjay Kumar, former chairman and CEO of Computer Associates International (CA), one of the largest computer software companies, to 12 years in prison and a $8 million fine in a $2.2 billion accounting fraud. He was also given three years of supervised release for each of eight counts to which he pleaded guilty.
Federal Judge I Leo Glasser handed down the sentence for the 44-year-old Kumar's active role in a massive accounting scheme that cost its shareholders more than $400 million. Kumar pleaded guilty to charges, including conspiracy, securities fraud and obstruction of justice even before the start of trial in April last.
"I know that I was wrong and there was no excuse for my conduct," Kumar told the judge. "I do apologise for my mistakes and ask for forgiveness from all involved."
The prosecution said as part of his accounting scheme, Kumar indecently booked software licence revenue from 1999 to 2000 - in what is dubbed as 'the 35-day month', in order to fulfil Wall Street analysts' profit expectations and then lied to investigators about it. Kumar and other company officials also instructed salespersons to report deals even beyond the quarter.
Computer Associates, meanwhile, has agreed to pay $225 million in shareholder restitution and continue to cooperate with the government as part of a deferred prosecution agreement. Under US federal law, Kumar could have faced life imprisonment but Judge Glasser said that would be an unreasonable punishment for a financial fraud.
Long Island-based CA Inc is the world's fifth-largest software provider and employs 15,000 people worldwide. Kumar, who was CEO of Computer Associates, was also the owner of the professional ice hockey team, New York Islanders.
