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Former CA Boss Kumar To Pay Millions To Fraud Victims
After paying $52 million, Kumar must contribute 20% of any income he earns until he makes full restitution for up to $800 million in losses suffered by investors.
April 13, 2007
1 Min Read
Former Computer Associates CEO Sanjay Kumar must attempt to make restitution for up to $800 million in losses suffered by investors who lost money as a result of an accounting fraud scheme masterminded by Kumar.
Under an agreement hammered out Friday in federal court in New York, Kumar must pay $40 million into a restitution fund by the end of the month. He also must pay in an additional $10 million by the end of July and another $2 million by the end of 2008.
Beyond that, Kumar must contribute to the fund 20% of any income earned after he is released from a 12-year prison term, until the full amount is satisfied.
Kumar received the prison sentence and an $8 million fine in November, following his conviction on charges of securities fraud. A jury found that Kumar presided over a scheme to falsely inflate CA's quarterly sales numbers by adopting a 35-day month internally.
Six of Kumar's fellow executives at CA have pled guilty to criminal charges related to the case, and the company itself has agreed to contribute $225 million to the victims' fund. To date, more than 95,000 individuals have made claims against the fund.
Kumar also has agreed to pay CA $15 million to reimburse the company for legal fees it spent on his defense. A CA spokesman said Friday that the agreement is "the result of our ongoing effort to recover ill gotten gains" from its former CEO.
Kumar led CA from 2000 to 2004, when he resigned from the post.
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