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Sanjay Kumar ex-CEO of Computer Associates International Inc

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Sanjay Kumar jailed for 12 years and to pay $798.6 million in restitution

New York, April 13, 2007
Sant Singh

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 conduct."

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 2006.


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 provider.

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 and 2000.

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 office.

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.


NRI Sanjay Kumar ex-CEO of Computer Associates International Inc was charged with securities fraud

NEW YORK, September 23 2004
Reuters

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 officers.

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.

BILLION-DOLLAR BONUS

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 tough year.

New York, November 12, 2002
CRN

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. 30.

"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 at CA.

"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 proxy battle.

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 lines.

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," Drolet says.

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 planning.

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 says.

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 says.

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 says.

 

 


NRI Sanjay Kumar ex-CEO of Computer Associates International Inc was charged with securities fraud

Sanjay Kumar was born in 1962 in Colombo, Sri Lanka

  • Kumar moved to the United States from Sri Lanka with his family when he was 14. He eventually became director of software development at UCCEL Corporation. In 1987, Computer Associates International purchased UCCEL, and Kumar stayed on.
  • He held senior positions in development, strategic planning, and operations, before being named president and CEO, replacing Charles Wang, in 1994. Kumar expanded the firm's range of computer networking and Internet business services. He resigned as CEO in April 2004 and in Sept. 2004, Kumar and Computer Associate's former head of worldwide sales were indicted on charges of securities fraud conspiracy and obstruction of justice.
  • He received a 12-year prison sentence and $8 million dollar fine in Nov. 2006.