Ex-CEO of Indian origin to pay millions in fraud case
Sanjay Kumar, found guilty in an accounting fraud, will pay about $52 mn.india Updated: Apr 14, 2007 15:36 IST
An Indian origin former chief executive found guilty in an accounting fraud will pay about USD 52 million over two years to the victims, a media report said.
Sanjay Kumar, the former chief executive of Computer Associates, who is scheduled to begin serving a 12-year prison term this month, is liable to pay USD 800 million under a restitution agreement cleared by a US judge on Friday.
However, he will actually pay about USD 52 million over the next two years, the majority of his and his family's assets.
Most of the remaining restitution will probably never be paid, although when Kumar leaves prison the government will have the right to garnish 20 per cent of his wages.
The agreement was filed last week in Federal District Court in Brooklyn before Judge I. Leo Glasser, who has overseen the long-running case. Judge Glasser approved the deal on Friday after a brief hearing, the New York Times said.
Kumar, once a part owner of the New York Islanders and one of the high-profile executives on Long Island, pleaded guilty last year to a conspiracy to inflate Computer Associates' sales in 1999 and 2000 and to interfere with the subsequent federal investigation.
Besides the restitution, Kumar must also pay an USD eight million in fine.
As part of the conspiracy, Kumar lied repeatedly to investigators and even authorised paying USD 3.7 million to buy the silence of a potential witness.
Several other former company executives also pleaded guilty in the scheme, though Charles B Wang, the founder and longtime chairman of Computer Associates, was never charged.
The company is now called CA Inc has offices across the world, including India.
Kumar admitted backdating contracts, and the indictment and other supporting evidence referring to repeated sham sales.
As part of the restitution agreement, Kumar will pay about USD 20 million from his own assets, while trusts he created for his wife and children will pay the remainder.
The company has already paid USD 225 million to the restitution fund. Other senior executives who pleaded guilty in the case will also have to make restitution, although their contributions will be much less than Kumar's.