The former chief executive of Computer Associates will pay nearly $800 million in restitution to investors who lost money because of the company’s accounting fraud.
Sanjay Kumar, who will begin serving a 12-year prison term this month, will pay about $52 million this year, the majority of his and his family’s assets. Kumar must pay an $8 million fine that was imposed last year. Most of the remaining restitution will probably never be paid, although when Kumar leaves prison the government will have the right to garnish 20 percent of his wages.
Kumar pleaded guilty last year to a conspiracy to inflate Computer Associates’ sales in 1999 and 2000 by booking false sales and backdating contracts. As part of the conspiracy to cover up the fraud later, he also authorized payments to buy the silence of a witness. At the height of the fraud in 2000, the company claimed it had more than $6 billion in sales. Last year, the company, now CA Inc., reported less than $4 billion in sales.
The company has already paid $225 million to the restitution fund, and several other former company executives who pleaded guilty in the scheme will likely also have to pay restitution.
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