Sanjay Kumar, former chief executive of Computer Associates International Inc., pleaded guilty to charges he led a $2.2 billion accounting fraud at the company, two weeks before he and an ex-colleague were to begin trial.
Kumar, 44, and his co-defendant, former sales executive Stephen Richards, 41, pleaded guilty before US District Judge I. Leo Glasser in federal court in Brooklyn, N.Y. The two men, who were scheduled for trial May 8, pleaded guilty to all charges against them in the 2004 indictment.
Kumar and Richards were charged with illegally inflating revenue at Computer Associates in 2000 by backdating contracts. In 2004, the company, now known as CA Inc., agreed to make corporate governance changes and pay $225 million in restitution to avoid criminal prosecution. CA is the number two maker of mainframe computer software.
Jacob Frenkel, a former Securities and Exchange Commission lawyer now in private practice, said the case against Kumar and Richards may have been simpler to prove than the fraud charges against former Enron Corp. executives Kenneth Lay and Jeffrey Skilling. ''Here there is a trail of smoke coming out of the cannon," Frenkel said. ''It's big and obvious, and for that reason they decided to accept responsibility."
Kumar faces a maximum of 90 years in prison. Richards faces 50 years. Glasser scheduled sentencing for Sept. 12.
John P. Cooney, Kumar's lawyer, said, ''I have no comment," when asked why his client pleaded guilty today to all the charges against him. Kumar declined to comment.
David Zornow, an attorney for Richards, said he had ''no comment." Prosecutors also declined to comment.