Indian ex-CEO to pay millions in fraud case

An Indian-origin former chief executive found guilty in an accounting fraud will pay about $52 million over two years to the victims, a media report said.

Sanjay Kumar, the former chief executive of Computer Associates, who is scheduled to begin serving a 12-year prison term this month, is liable to pay $800 million under a restitution agreement cleared by a US judge yesterday.

However, he will actually pay about $52 million over the next two years, the majority of his and his family's assets.

Most of the remaining restitution will probably never be paid, although when Kumar leaves prison the government will have the right to garnish 20 per cent of his wages.

The agreement was filed last week in Federal District Court in Brooklyn before Judge I Leo Glasser, who has overseen the long-running case. Judge Glasser approved the deal yesterday after a brief hearing, the New York Times said.

Kumar, once a part-owner of the New York Islanders and one of the high-profile executives on Long Island, pleaded guilty last year to a conspiracy to inflate Computer Associates' sales in 1999 and 2000 and to interfere with the subsequent federal investigation.

Besides the restitution, Kumar must also pay $ 8 million as fine.

As part of the conspiracy, Kumar lied repeatedly to investigators and even authorised paying $3.7 million to buy the silence of a potential witness.

Kumar admitted backdating contracts, and the indictment and other supporting evidence referring to repeated sham sales.