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Ex-CEO of Computer Associates sentenced to 12 years

By Arthur J. Pais in New York
Last updated on: November 03, 2006 21:24 IST
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Convicted business tycoon Sanjay Kumar's biggest fear -- of being poor-- made him get out of a college in South Carolina over 20 years ago and start tinkering with business ideas that would lead him after two decades to be the head of one of the biggest computer firms in the world.

He would often recall, while looking back at his success, the principles his mother had drilled into him. "Whether you run your own business or work for someone else or become a church minister, remember being honest shapes everything you do," his mother, Montessori teacher Swarna Kumar, had told him many times.

On November 2, Kumar, 44, whose rise from a Tamil war refugee from Sri Lanka to the head of Computer Associates was often described in magazine articles as the embodiment of American dream, was sentenced to 12 years in prison.

And Kumar, whose personal wealth exceeded $100 million not too long ago, was ordered to pay $8 million fine. Federal prosecutors have said the accounting fraud aimed at boosting the company's visibility cost stockholders over $3 billion. Kumar could still be asked to pay part of that money as restitution.

Kumar, who had once said he wanted to emulate Bill Gates and get every child in India learn computer skills was scolded by a New York judge for allowing his "cupidity" to lead him to mastermind and then cover up a massive accounting fraud, one of the biggest in the computer world.

Though the prosecution had asked for a life sentence for Kumar, U.S. District Judge I. Leo Glasser relented in his Brooklyn, New York courtroom as Kumar's lawyer long listed many humanitarian efforts the fallen executive had carried out through his company in India,Indonesia and a pocket of Africa.

But the court did not hear anything about Kumar helping out his mother, who died two years ago, in running her Montessori school in a small city in Georgia. And for a good reason. Swarna Kumar would not tell anyone in the town her son was a millionaire. And she would not want any money from her son.

"I believe I am doing the Lord's work when I try to do things in my small way, without publicizing it," she used to say. The family became Christian after arriving inAmerica over 30 years ago.

Kumar has now joined the executives of Enron, WorldCom and Tyco who had been sentenced recently for white-collar crimes.

Kumar, whose troubles started surfacing nearly two years ago, pleaded guilty in April to conspiracy, fraud, obstruction of justice, lying in filings with the Securities and Exchange Commission. He also admitted lying to FBI agents.

Before he was sentenced, Kumar told the judge, "I stand before you today to take full responsibility for my actions. I know that I was wrong."

Assistant U.S. Attorney Eric Komitee had called Kumar's attempt to cover up his actions by lying, prompting his employees to lie and trying to bribe one possible witness, offering him over $3.7 million for his silence, "the most brazen and comprehensive obstruction of justice in the modern era of corporate crime.

According to the prosecution Kumar and other CA executives backdated contracts to inflate revenue at the Islandia, New York-based company which till three years ago was the world's second-largest maker of mainframe computer software.

While Judge Glasser refused to accept the prosecution's demand for life sentence for Kumar, he rejected the defense plea for a lesser sentence.

He pointed out that Kumar pleaded guilty too late, in fact almost on eve of his trial and still contested his involvement in erasing his laptop's memory when he heard of the investigation at CA.

"Kumar has already been severely punished," attorney Robert Fiske Jr. told the judge. "His actions have brought shame to his family." Kumar lives in a palatial Long Island house with his wife and two children.

Kumar, who immigrated to Greenville, South Carolina, from Sri Lanka at age 14, was named CEO in 2000 by the Computer Associates founder, Charles Wang, whose success an entrepreneur was also the subject of many articles in such magazines as Forbes. Wang has also fallen in public esteem, though he did not face any criminal charges.

Kumar, who was known for his aggressive takeover of competing companies, became chairman of CA in 2002 when Wang retired. He stepped down two years later after the company admitted it had backdated contracts, and became chief software architect. He was indicted on Sept. 22, 2004. the same week after Computer Associates agreed to pay a $225 million fine to resolve the investigation.

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