Ex-CA chief gets 12-year jail term

Sanjay Kumar, the former chief executive of CA, has been sentenced to 12 years in federal prison for his role in a $2.2 billion (€1.73 billion) accounting fraud at the computer software company that cost its shareholders more than $400 million.

US district judge I Leo Glasser also fined the former executive $8 million at the hearing in Brooklyn federal court.

Kumar (44) pleaded guilty to charges including conspiracy, securities fraud and obstruction of justice in April, just two weeks before his trial was due to start. He had faced life in prison under federal sentencing guidelines, but Judge Glasser said that would be an unreasonable punishment for a financial fraud.

As part of an accounting scheme, Kumar improperly booked software licence revenue from 1999 to 2000 in order to meet Wall Street analysts' profit expectations and then lied to investigators about it, the government said. "I know that I was wrong and there was no excuse for my misconduct," Kumar told the judge. "I've tried my best to work hard, help others in need and be a good family man."

His lawyers made an appeal for leniency, citing Kumar's charitable works for children in New York, elephants in Africa and victims of the 2004 tsunami in his native Sri Lanka. They also said that CA, which has a presence in Ireland, was not heavily damaged by the accounting scheme.

"This is not a case where the fraud affected the fundamental health of the company," said defence attorney Robert Fiske. "CA is still a thriving company."

But while making the government's appeal for a stricter punishment, assistant US attorney Eric Komitee told the judge Kumar's actions represented "the most brazen and comprehensive obstruction in the modern era of corporate crime".

CA, previously known as Computer Associates International, restated its results for fiscal 2001 through 2004 after Kumar left the company in 2004.

Judge Glasser said Kumar had "embodied the American dream" before committing his crimes.

CA has reported a 10 per cent fall in second-quarter new orders compared to the year earlier period, blaming a restructuring of its sales force. It said the drop would hurt full-year profits.