Sanjay Kumar, former chief executive of Computer Associates, has been sentenced to 12 years in jail and fined £4.3m for eight counts of securities fraud, obstruction of justice and providing false statements.
The amount of restitution to be paid to victims of the fraud will be determined by the New York District Court within 90 days of this week’s sentencing.
Kumar, who had earlier pleaded guilty to the charges, had admitted fraudulently inflating the quarterly revenue and earnings of Computer Associates.
He did this by keeping the company’s books open past quarter-end dates to give the appearance that the company had met or exceeded quarterly revenue projections, when the company’s performance had actually fallen short of those goals.
Through this fraudulent scheme, Kumar enabled the company to prematurely generate more than £1.08bn in revenue between 1999 and 2000, which resulted in losses to the company’s shareholders in excess of £210m.
Kumar 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.
At the sentencing, judge Glasser found that Kumar had also tampered with a Linux-driven laptop to conceal its contents from the government and Computer Associates’ audit committee.
At previous court hearings, Computer Associates’ former chief financial officer, head of worldwide sales, general counsel, and three additional top financial officers had admitted their guilt and accepted responsibility for their crimes.
In addition, the company, now trading as CA, has paid £118m to a shareholder restitution fund, and it continues to co-operate with the government pursuant to a deferred prosecution agreement.
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