Computer Associates International's chief executive officer Sanjay Kumar and CA's former head of worldwide sales, Stephen Richards, have been indicted on charges of securities fraud conspiracy and obstruction of justice.
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CA's former general counsel and senior vice-president, Stephen Woghin, also pleaded guilty to similar charges for his role in what the government called a companywide accounting fraud scheme.
The US Department of Justice announced that CA has been charged with, and accepted responsibility for, the illegal conduct of its former executives and has agreed to pay $225m (£125m) to compensate victims of the fraud, among other reparations.
If CA abides by the terms of the agreement after an 18-month period, the US Attorney's Office has agreed not to prosecute CA. That deal, however, does not protect any individuals from prosecution, the DOJ said.
Attorney general James Comey said the defendants were "accused of perpetrating a massive accounting fraud that cost public investors hundreds of millions of dollars when it collapsed". The defendants "allegedly tried to cover up their crimes by lying", he said.
According to the government, CA engaged in a systematic practice of fraudulently recording and reporting within a financial quarter revenue associated with licence agreements, even though those agreements had not been finalised and signed during the period.
The indicment said that Kumar and Richards personally advanced the goals of the 35-day practice. Kumar and former CA chief financial officer Ira Zar kept CA's books open at the end of financial periods in 2000 and sales managers were told by them to finalise and then backdate licence agreements.
The government said the extent of the fraud was not known until 26 April, when CA filed forms with the US Securities and Exchange Commission that showed $2.2bn of revenue was booked prematurely.
"With these agreements, CA has taken a critical step in closing this deeply troubling chapter in its history," said CA chairman Lewis Ranieri. In addition to the $225m payment, CA agreed to actively assist government investigators in an attempt to recover compensation from any present or former CA officer or employee involved in improper conduct at the company.
Any prosecution of the company was deferred for 18 months, and may be dismissed if CA is found to have complied with the terms of the agreement, CA officials said.
That deferral period caused one analyst, Stephen Elliott at IDC, to note that the situation with CA is only "pseudo-resolved" and could affect whoever CA names as permanent chief executive.
Elliott said large CA customers should not be concerned about using CA products, and said the agreement should improve CA's ability to acquire smaller companies to provide customers with new and innovative technologies.
The uncertainty of a federal investigation has "put on hold" CA's acquisition ability in recent months, Elliott added.
Kumar and Richards could not be immediately reached for comment.
Matt Hamblen writes for Computerworld