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Ex-CEO will have to repay at least $52-million in fraud case

By ASSOCIATED PRESS
Published April 14, 2007

NEW YORK - A judge has signed off on a restitution agreement requiring the former chief executive of Computer Associates International Inc. to pay at least $52-million - including proceeds from the sale of his yacht and pair of Ferraris - to victims of a huge accounting fraud at one of the world's largest software companies.

U.S. District Judge Leo Glasser approved the deal on Friday after a brief hearing in Brooklyn at which a special master overseeing a restitution fund said tens of thousands of people who lost money on the company would recover only a fraction of their investments.

The agreement with Sanjay Kumar, who was sentenced to 12 years in prison in November for his role in the scandal, would theoretically make him liable for as much as $798.6-million in payments to investors.

Prosecutors acknowledge, though, that Kumar and his family will probably never have enough money to pay that amount.

Also on Friday, founder and former Computer Associates chairman Charles Wang was accused of directing and participating in fraudulent accounting, according to the Wall Street Journal.

A special committee of the company's board made the accusations in a court filing in Delaware, the paper reported.

Wang said he was "appalled" by the report. "I intend to vigorously defend my good name and fight any and all efforts to place the crimes of Kumar and his management team at my feet," he said.

Wang stepped down as chief executive of the company in 2000 and resigned as chairman in 2002, the paper said. The company formed a committee in 2005 to investigate accusations and recover funds for the company. In addition to Wang, the committee named a number of executives and directors from past years for possible legal action.

As for Kumar's restitution agreement, which was filed this month, it calls for him to instead make installment payments of $40-million, $10-million and $2-million by December 2008, then pay 20 percent of his annual income once he is released from prison.

Those payments would continue for the rest of his life.

Kumar, 45, will be forced to sell off his stock portfolio, a 57-foot yacht in Naples, Fla., and four cars, including the Ferraris. But his family will keep its estate in Upper Brookville, on Long Island.

[Last modified April 13, 2007, 23:57:11]