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article image'Computer Associates' CEO Ordered To Pay $800 Million In Restitution

By malan     Apr 13, 2007 in Crime
Sanjay Kumar was sentenced to 12 years in federal detention, for orchestrating and covering up the $2.2 billion accounting fraud at CA.
Kumar will most likely lose everything he owns as he attempts to pay off the mammoth restitution fees, he is already being forced to sell his yacht and pair of Ferraris to pay back victims of a huge accounting fraud at one of the world's largest software companies.
U.S. District Judge Leo Glasser says that tens of thousands of people lost money from company stocks due to accounting fraud by CA and a cover up by Kumar, and sadly, the will most likely never recover their full losses.
Kumar pleaded guilty a year ago to obstruction of justice and securities fraud in connection with his actions at the company, which since has become known as CA Inc. But prosecutors say Kumar was not done and that he reported more than $2 Billion (with a B) in false revenue between 1999 and 2000 and that he was the mastermind of the entire operation and cover up that included backdating contracts, lying in court and trying to bribe potential witnesses.
Kumar was put on a 'payment plan' of sorts that would allow him to pay the debt off over time but Kumar was also sentenced to 12 years in prison which means that he would miss the payment schedule and potentially owe as much as $798.6 million in payments to investors.
Prosecutors acknowledged that Kumar could never pay that much money and instead cut a deal that says Kumar will make installment payments of $40 million, $10 million and $2 million by December of 2008, then pay 20 percent of his annual income once he is released from prison.
This means Kumar will be making these payments for the rest of his life. The 45 year old ex-CEO will be forced to sell his stocks, his yacht and his cars but his family is being allowed to keep their home.
It's great to see someone really paying for fraudulent behavior like this, it's becoming too common for big corporations to involve themselves in these kinds of accounting practices.
So many people are impacted, so many lives are ruined and the executives normally get off because they have the money to hire great attorneys... but this time, in this case, Kumar is really, really going to regret doing what he did and hopeful the people that his actions impacted will get back at least some of what they lost.
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