Ex-CA exec pleads guilty in hush money handout scandal
So much for compliance
A former Computer Associates International executive has pleaded guilty to obstruction of justice after he attempted to buy customers' silence over a company accounting scandal.
Thomas Bennett, was a former business development executive with Computer Associates, now known as CA. With 15,000 employees, CA is the world's fifth largest software company.
US prosecutors alleged Bennett conspired with other executives to inflate the company's revenue figures in 1999 and 2000 through business deals that improperly accounted revenue.
Once news of the company's accounting misdeeds broke, prosecutors claim then chief executive Sanjay Kumar authorized Bennett to pay millions of dollars to certain clients to stop them from reporting the fraud to the FBI and the Securities and Exchange Commission (SEC).
Bennett now faces a maximum five years federal prison sentence and a $250,000 fine. Kumar and the company's former head of worldwide sales Stephen Richards, meanwhile, have already pleaded guilty to obstruction of justice and securities charges and face up to 20 years in prison, with sentencing due in September.
Separately, CA, has requested more time from the SEC to file its end-of-year financial report. Ironically, CA, which is busy touting its software as a solution for customers managing the complexities of the Sarbanes Oxley Act, has cited Sarbanes Oxley as the reason for delay.
"CA will request the extension because it does not expect to complete the preparation of its consolidated financial statements and management's assessment of internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002 by the initial filing deadline of June 14, 2006," the company said in a statement.®