Risk Management

Ex-CA Chief Pays Final Fraud Bill

Sanjay Kumar "wanted to get it over with" — and he wants to get out of jail sooner, too.
Stephen TaubJanuary 14, 2008

Sanjay Kumar, the jailed former chief executive of Computer Associates, has made his final $2 million payment as part of his restitution for the software company’s $2.2 billion accounting fraud, Newsday reported.

The payment — made one year ahead of schedule — ends a freeze that had been placed on his holdings after he pled guilty in 2006 to fraud and obstruction charges. “He just wanted to get it over with,” Lawrence McMichael, Kumar’s lawyer, told Newsday.

The only remaining financial obligation allows the government to garnish 20 percent of his pretax wages.

Meanwhile, Kumar, who was formerly very close with Computer Associates founder Charles Wang — the pair at one time jointly owned the New York Islanders hockey team — has appealed his 12-year sentence. He is currently scheduled to be released from prison in 2019.

According to Newsday, McMichael will argue that more lenient sentencing guidelines at the time Kumar’s crimes were committed should have been used.

Kumar’s defense also reportedly asserts that the government overestimated the fraud’s financial impact because his crime involved shifting revenue, not stolen or fabricated money. His lawyer is expected to argue that the government’s expert should have subtracted revenues that ultimately made it into CA’s financials when determining the final impact.

Newsdaynoted that Kumar initially was ordered to repay $1.02 billion. Eventually, under a settlement he agreed to pay just $52 million.