NEWS Computer Associates' former CEO was indicted on criminal charges related to fraudulent accounting practices, and the company on Wednesday agreed to pay $225m to settle with federal prosecutors.
The software company's former chief executive, Sanjay Kumar, and the company's former head of worldwide sales, Stephen Richards, were charged with securities fraud conspiracy, obstruction of justice and conspiracy to obstruct justice. The 10-count indictments against Kumar and Richards were unsealed on Wednesday as part of the Justice Department's criminal case against the individuals at CA.
Also, the company's former general counsel, Stephen Woghin, pleaded guilty on Wednesday to securities fraud conspiracy and obstruction of justice in US District Court in Brooklyn, New York.
Deputy Attorney General Comey, said in a statement: "The defendants are accused of perpetrating a massive accounting fraud that cost public investors hundreds of millions of dollars when it collapsed. Then they allegedly tried to cover up their crimes by lying."
The case stems from CA's business practices from January, 1998, to 30 September, 2000, when the company back-dated contracts to meet financial analysts' quarterly targets. The company's top executives, including Kumar, were awarded millions of dollars in bonuses as a result of meeting those goals.
Computer Associates has previously admitted to wrongdoing and ousted several former executives. As a result of an internal audit, the company in April restated $2.2bn in revenue for fiscal year 2000 and 2001 that was booked improperly.
Kumar, who became CEO in 2000, stepped down from the CEO position in April of this year and was pushed out entirely in June. CA executives said Kumar should be responsible for the company's past accounting practices and the subsequent investigations.
Martin LaMonica writes for News.com
