Update: Former CA CEO sent to prison

Sanjay Kumar, the former chief executive officer of Computer Associates International Inc., was sentenced Thursday to 12 years in prison and a US$8 million fine on securities fraud charges.

Kumar pleaded guilty in April to obstruction of justice and securities fraud charges at the company, now known as CA Inc. He faced a sentence of up to 20 years in prison.

Kumar remains free on bond while U.S. District Court Judge I. Leo Glasser decides how much restitution he will order Kumar to pay to victims, said a spokesman for the U.S. Attorney's Office for the Eastern District of New York. The judge said he will decide the restitution amount within 90 days, the spokesman said.

Kumar and Stephen Richards, the company's former worldwide sales head, both pleaded guilty after they were accused of fraudulent accounting practices, including falsely reporting hundreds of millions of dollars in revenue for licensing agreements during fiscal quarters in which the deals had not yet been finalized.

In early 2000, CA signed a $44.5 million license deal with a nearly insolvent customer in which it had an ownership stake, according to court records. It then back-dated the contract so it could be recorded in the prior quarter. In the next quarter, CA reversed the revenue in its internal records but did not publicly restate its results.

CA spokeswoman Jennifer Hallahan said the sentencing is "another step" in putting the company's past behind it.

"We are a dramatically different organization than we were more than two years ago, when Mr. Kumar left the company," she said. "We’re focused on building a strong company to the benefit of shareholders, customers and employees, we’ve been careful to put in place an infrastructure that promotes integrity, compliance and good governance."

The company is working on the return of any "ill-gotten gains" from former executives, Hallahan added.