Kumar and Richards were charged with prematurely reporting $2.2 billion in revenue for licensing agreements during fiscal quarters in which the deals had not yet been finalized, according to the government. The government's indictment asserted that the two men knowingly distorted CA's accounting and took steps to hide their actions.

In early 2000, for instance, CA signed a $44.5 million license deal with a "nearly insolvent" customer in which it also had an ownership stake. It then back-dated the contract so it could be recorded in the prior quarter, according to the indictment. In the next quarter, expecting that it would not be able to collect on the contract, CA reversed the revenue in its internal records but did not publicly restate its results.

Kumar was also accused of authorizing a $3.7 million consulting contract in early 2003 that essentially amounted to hush money for an unnamed executive at a CA customer company who knew of CA's accounting improprieties. According to the indictment, this executive had arranged a $27 million license contract with CA in March 2000, but as part of the deal, CA spent a similar amount on software from the executive's company. Neither software package was ever used, making the deal a "revenue swap" that can't legally be treated as a sale.

When the unidentified executive threatened to alert government investigators to the arrangement, Kumar conspired with CA's general counsel to arrange the consulting payoff, the indictment said.