Former IT boss jailed for 12 years over '35-day month' scam

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The Independent Online

Sanjay Kumar, the former chief executive of the IT contractor Computer Associates, has been sentenced to 12 years in jail for a $2.2bn (£1.2bn) cover-up that a New York judge described as "the most brazen and comprehensive in the modern era of corporate crime".

Kumar, 44, pleaded guilty to charges including conspiracy, securities fraud and obstruction of justice over a scheme to inflate sales and profits by pretending lucrative contracts were signed earlier than, in fact, they had been.

Those in the know at the company dubbed their accounting scheme "the 35-day month".

Handing down a sentence of 144 months in a federal prison, followed by a further three years of supervision, and an $8m fine, Judge Leo Glasser said Kumar had "done violence" to shareholders' expectations of corporate probity.

Kumar is the last of the high-profile executives to face justice for the wave of accounting scandals that engulfed corporate America as the boom turned to bust.

Last month, the former chief executive of Enron, Jeffrey Skilling, was sentenced to 24 years, and Bernie Ebbers, the founder of the telecoms group WorldCom, began a 25-year jail term in September.

Unlike WorldCom and Enron, Computer Associates - since renamed CA Inc - did not go bankrupt, but it has struggled to untangle its finances and continued to be plagued by the need to restate accounts.

Kumar said he took full responsibility for his actions. "I know that I was wrong and there was no excuse for my misconduct," he said. His lawyers made a lengthy appeal for leniency, citing Kumar's charitable works for children in Long Island, New York, and victims of the 2004 tsunami in his native Sri Lanka.

"This is not a case where the fraud affected the fundamental health of the company," said defence attorney Robert Fiske. "CA is still a thriving company."

Several former CA executives, including the ex-sales chief Stephen Richards, have pleaded guilty to criminal charges in the matter. CA called Kumar's sentencing another step in its transformation under the current chief executive John Swainson.