Former CA head Sanjay Kumar has pleaded not guilty to charges of securities fraud and obstruction of justice involving a multi-billion dollar accounting scandal.
Yesterday, the US District Court in Brooklyn, New York, also heard Stephen Richards, CA's former head of worldwide sales also plead not guilty to charges of fraud and obstruction of justice. In contrast, the company's top lawyer, Stephen Woghin, pleaded guilty yesterday to similar charges for his participation in what government officials have described as a company-wide accounting fraud scheme.
Earlier in the week, the US Department of Justice (DoJ) announced that Computer Associates was charged with the conduct of its former executives and had agreed to pay some $225 million to compensate victims of the fraud. If the company abides by the terms of the agreement through an 18-month period, the US Attorney's office said they will not prosecute the company.
In its indictment, the government said that at the heart of its case is the so-called "35-day month". The government claims CA made a systematic practice out of fraudulently recording and reporting within a fiscal quarter revenues associated with licensing agreements despite those agreements not having been finalised and signed during that period. Both Kumar and Richards "personally advanced" the goals of the 35-day month practice, it is alleged.
CA, which is the world's fourth largest software developer, has restated its financial results from 2000 and 2001 to reflect $2.2 billion in revenues that was improperly booked.
In a statement released by his lawyers, Kumar stated that he expects to be exonerated of all charges.