Former CA CEO Sanjay Kumar gets 12 years in prison

02.11.2006
Sanjay Kumar, the former CEO of CA Inc., was sentenced Thursday to 12 years in federal prison for his role in a financial scandal at the company that prematurely reported US$2.2 billion in software licensing revenue between 1999 to 2000.

Kumar, who resigned from CA in June 2004 after the scandal unfolded, was also hit with an $8 million fine by Judge I. Leo Grasser in U.S. District Court in Brooklyn, N.Y. at his sentencing.

Kumar will remain free on bond until Grasser decides the issue of restitution to the victims of the accounting scandal, said a spokesman in the U.S. Attorney's Office in Brooklyn.

The prison where Kumar will serve his sentence has not yet been announced. A recommendation will be made by the court and a final decision will be made by the U.S. Bureau of Prisons.

"The integrity of U.S. financial markets depends on corporate executives accurately reporting their companies' performance to the investing public," U.S. Attorney Roslynn R. Mauskopf said in a statement. "In violation of the shareholders' trust and the federal securities laws, [Kumar] persistently misrepresented the company's financial position and orchestrated a pervasive cover-up scheme. 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."

Mark J. Mershon, assistant director-in-charge of the FBI's New York Field Office, which assisted in the CA accounting investigation, said in a statement that the sentence fit Kumar's crimes.