Former CA Executive Gets 12 Years
Accounting Fraud Cost $400 Million

By Tom Hays
Associated Press
Friday, November 3, 2006

NEW YORK, Nov. 2 -- The former chief executive of Computer Associates International Inc. was sentenced to 12 years in prison and fined $8 million yesterday for an accounting fraud scandal estimated to have cost investors $400 million.

Sanjay Kumar, 44, had pleaded guilty in April to obstruction of justice and securities fraud charges at one of the world's largest software companies, which has since been renamed CA Inc.

Under federal sentencing guidelines, Kumar could have faced life in prison, but the judge called that punishment unreasonable.

"I know that I was wrong, and there was no excuse for my conduct," Kumar told the judge. "I do apologize for my mistakes and ask for forgiveness from all involved."

Prosecutor Eric Komitee argued that Kumar should be severely punished as the architect of an elaborate coverup that was "the most brazen in the modern era of corporate crime."

The defense sought leniency by detailing Kumar's rise from Sri Lankan immigrant to one of the leaders of the software industry and by emphasizing his philanthropic efforts.

U.S. District Judge Leo Glasser scolded the defendant for not fully acknowledging that the conspiracy cost shareholders an estimated $400 million. Though not a violent criminal, Kumar "did violence to the legitimate expectations of shareholders," the judge said.

Kumar was ordered to surrender Feb. 27. He left the courthouse without speaking to reporters.

According to a 2004 indictment, Kumar orchestrated a plot to report more than $2 billion in false revenue in 1999 and 2000.

The indictment also charged that Kumar and other executives instructed salespeople to complete deals after the quarter had closed -- a practice known within the company as the "35-day month" -- and "cleaned up" contracts by removing time stamps from faxes.

After the FBI began investigating the company in 2002, Kumar orchestrated a coverup that involved lying under oath and trying to buy the silence of a potential witness, authorities said.

"The sentencing of Sanjay Kumar today is another step in putting the past of Computer Associates further behind the new CA," said company spokeswoman Jennifer Hallahan. "We are a dramatically different organization than we were more than two years ago, when Mr. Kumar left the company."