jailed for 12 years and to pay $798.6 million in restitution
New York, April 13, 2007
On April 13, 2007, Judge Glasser approved an agreement
for Kumar to pay $798.6 million in restitution, at least $52 million
by December 31, 2008.
After he serves his 12-year prison term, starting
in November 2007, the government can then take 20% of his future
annual pay for restitution.
"I stand before your honor today to take full
responsibility for my actions," Kumar said prior to sentencing.
"I know that I was wrong and there’s no excuse for my
At one time, Kumar was a part owner, with Wang, in the New York
Islanders hockey team and New York Dragons arena football team but,
according to local news reports, Wang purchased Kumar's share in
Sanjay Kumar sentenced
12 years in prison
CA's Kumar jailed over fraud
Candace Lombardi CNET News.com
Nov. 03, 2006
Former CA chief executive Sanjay Kumar was sentenced on Thursday
to 12 years in prison and ordered to pay an $8m fine for his part
in a long-running bookkeeping scandal at the management software
Kumar is one of several former senior executives at the company,
which was formerly known as Computer Associates, charged in connection
with premature reporting of $2.2bn in software licensing revenue
and the use of a fraudulent accounting scheme designed to make it
appear as if the company was meeting quarterly expectations in 1999
The scheme resulted in a shareholder loss of more than $400m, according
to a statement released by the US Attorney's office. The company
had previously paid $225m to settle with federal prosecutors.
"The sentence imposed today sends the message that accounting
fraud is a serious crime and that obstructing justice will inevitably
make things worse, not better, for defendants under investigation,"
US Attorney Roslynn R Mauskopf said in a statement.
At Thursday's sentencing, Judge I Leo Glasser, of the New York
Eastern District court in Brooklyn, was also informed that Kumar
had tampered with a laptop to conceal incriminating contents, according
to a statement from the US Attorney's office.
"Kumar has also admitted obstructing the Government's investigation
by lying to federal investigators, and by directing Computer Associates'
employees to provide false explanations for the fraudulent accounting
practices to the Government," the statement said.
Kumar has until 27 February to get his affairs in order before
reporting for federal prison, under the terms of the sentence set
by Glasser. At that time, Glasser will also set the amount of restitution
to be paid to victims, according to a spokesman for the US Attorney's
Kumar was also given three years of supervised release for each
of the eight counts to which he pleaded guilty.
Kumar was indicted in September 2004 for crimes that included securities
fraud, obstruction of justice and false statements. In federal court
in 24 April, Kumar pleaded guilty to all of the charges for which
Glasser sentenced him on Thursday.
Earlier this year, Thomas Bennett, a former senior vice president
at CA, pleaded guilty to obstruction of justice, and Stephen Richards,
a sales executive, pleaded guilty to securities fraud conspiracy
and obstruction of justice.
The company's former general counsel, Stephen Woghin, pleaded guilty
to fraud and obstruction of justice in September 2004.
Sanjay Kumar ex-CEO of Computer Associates International Inc was
charged with securities fraud
NEW YORK, September 23 2004
Former Computer Associates International Inc chief executive
Sanjay Kumar was charged on Wednesday with securities fraud and
obstruction of justice stemming from a two-year investigation
of improper accounting at the software maker.
The company itself cut a deal with regulators on Wednesday promising
to pay $225 million to shareholders to settle federal accounting
fraud charges, as the government accused it of improperly booking
$2.2 billion in revenues.
A federal court, which heard a guilty plea from a former CA officer
on Wednesday, approved an agreement the could mean the company
avoids prosecution. It is allowing CA 18 months to pay the fine
and put a number of remedial policies in place.
Kumar and former global sales chief Stephen Richards were charged
in a 10-count indictment that was returned by a grand jury last
Friday and unsealed on Wednesday. The charges include securities
fraud, conspiracy and obstruction of justice.
Richards was also charged with one count of perjury, while Kumar
was charged with one count of making false statements to law enforcement
Kumar's attorneys said in a statement that he "denies any
wrongdoing and expects to be exonerated of all charges."
Richards' lawyers said the government "overreached"
as he was not responsible for determining "when revenue was
recognized." The US Securities and Exchange Commission (SEC)
also filed securities fraud charges against the company, Kumar,
Richards, and former general counsel Stephen Woghin.
"Computer Associates, through former executives Kumar, Richards,
Woghin and others, obstructed the SEC's investigation into the
company's accounting practices," the SEC said in a statement.
It also described how the fraud was conducted.
"Like a team that plays on after the final whistle has blown,
Computer Associates kept scoring until it had all the points it
needed to make every quarter look like a win," said director
of the SEC's northeast regional office, Mark Schonfeld.
Former general counsel Woghin pleaded guilty to securities fraud
conspiracy and obstruction of justice on Wednesday. He agreed
to be barred from working as an officer or director of a public
company and could also have to make a payment later.
Kumar, who joined Computer Associates in 1987 and was promoted
to CEO in 2000, stepped down as CEO in April and severed all ties
with the company in June. He had shared a $1 billion performance-based
stock award with two other executives months before CA stock dived
after a profit warning.
Computer Associates said on Wednesday that it is working with
the government to try to get back money former officers received
related to wrongdoing.
CA, which acknowledged it violated the law, has agreed to make
a number of changes, including reorganizing the finance department
and appointing two new independent directors to ensure that two
thirds of its board are independent members.
"This conduct was wrong. I want to be very clear on this
point: We fully support the government's efforts to bring wrongdoers
to justice," Computer Associates chairman Lewis Rainieri
said on a call with investors.
During the call Computer Associates said it would take a $215
million pretax charge in its fiscal second quarter partly covering
the $225 million payment that will go to shareholders. It already
booked a related charge for $10 million. It said it believes most
of the payments are tax deductible.
The Islandia, New York-based company said it hopes to be able
to appoint a permanent CEO "very shortly." Kenneth Cron
has been acting as interim CEO.
The company's former chief financial officer and three other
former top finance executives have pleaded guilty to criminal
charges and await sentencing. More than 15 executives and employees
have have left the company in the last year due to the investigation
CEO Sanjay Kumar
of Computer Associates International President , 2002 has been a
New York, November 12, 2002
Two federal agencies joined forces in February to launch an investigation,
still ongoing, into CA's past accounting practices. A few months
later, dissident shareholders started a second proxy fight for
seats on CA's board. And the company reported a loss of $117 million
on $1.54 billion in sales for the past two quarters ended Sept.
"It's kind of like a dog's life,one year is seven years,"
says Gary Quinn, executive vice president of sales and field operations
"I don't think most CEOs in their careers have encountered
what he's encountered in the past two years, and he's actually
managed his way through and steered our ship through it."
Kumar, now beginning his third year as the company's top executive,
remains undaunted. Despite the distractions, Kumar has maintained
CA's focus on rebuilding partner, investor and customer confidence
while restoring profitability. Insiders say Kumar, described as
an intelligent, hands-on leader who is as quick with a practical
joke as he is with a helping hand, is proving to be the right
man for the job.
Kumar recast CA as a model of corporate governance, adopting
new policies,including term limits for independent directors,and
adding seven new members to its 12-seat board this year. As a
result, proxy consulting firm Institutional Shareholder Services
says CA outperformed nearly 95 percent of its peers on governance
issues, a stark turnaround from last year when ISS endorsed dissident
shareholder Sam Wyly's minority slate of nominees in his first
quest to oust CA directors.
Kumar also took a controversial step to rid CA of Wyly's perpetual
proxy fights, at least for now, by paying the entrepreneur $10
million this summer to extend a noncompete agreement and to prohibit
any proxy challenges for the next five years. While some were
critical of the agreement, Kumar defended the payment as a justified
trade-off to prevent potential damage to CA's business from another
In addition to improving corporate governance and ending the
proxy battles, Kumar this year made drastic changes in the way
CA compensates its sales representatives. In April, CA launched
a channel-preferred compensation strategy in its storage unit
that pays its sales force more for channel deals than for direct
deals, a plan the company pledges to carry over into other product
CA's newfound channel commitment comes directly from Kumar, says
Michelle Drolet, CEO of Conqwest, a solution provider in Holliston,
Mass. "The question for CA is how channel-friendly are they,
and is [that friendliness] going to stay the distance? The more
I work with them, the more I see it's staying the distance,"
Kumar personally invited solution providers to set up offices
at the company's sales facilities to promote cooperation. He also
brought partners into more beta-testing and product-development
In addition, Kumar randomly calls channel partners to check on
CA's progress. "When it's the end of the quarter and our
folks are telling us about deals, I take a couple of them and
I call [solution providers] up and say, 'I know we won, but how
could we have done better?' You learn a lot that way," he
Kumar's personal involvement in day-to-day matters is his hallmark.
He has loaned employees money to cover moving expenses. He shakes
the hand of every kindergarten graduate of CA's day-care program.
And he is a generous community philanthropist.
"I find him to be a very caring, concerned human being,"
says Teddy Bookman, executive director of Friends of the Arts,
a nonprofit organization in Oyster Bay, N.Y., that Kumar and his
wife, Sylvia, support.
Kumar is personally involved in the tough stuff, too. One Friday
in July, after an internal audit disclosed that some employees
in the Framingham, Mass., office had falsely boosted commissions,
Kumar arrived at the office that evening and worked into the morning
hours with a team of managers to investigate. The inquiry led
to the dismissal of a dozen employees. "I'm not one of those
people that sends somebody in to go do the dirty work," he
Kumar, who was born in Sri Lanka, credits his parents with molding
his fundamental ethics. From his father, an animal husbandry researcher,
Kumar says he learned the value of patience, tolerance and broadmindedness.
From his mother, a school administrator, he learned leadership
by example. "She'd be the first person [at work], and she'd
be the last person to leave %85 and most days I'll be the first
person here and the last person to leave," he says.
Despite CA's tribulations, Kumar has made strides toward revamping
the company's image and improving the bottom line. Sales were
up 6 percent over the last two quarters, compared with the prior-year
period, while the company's loss was sliced by 81 percent. Once
the investigation is over and the economy picks up, people will
see the real CA, Quinn says. "All the efforts Sanjay has
put behind the company ... will start to materialize," he