Computer Associates' ex-CEO is charged

NEW YORK -- The former chief executive of software maker Computer Associates International was charged yesterday with securities fraud in a multibillion-dollar accounting scandal, and the company agreed to pay $225 million to stave off criminal charges.

The government agreed to defer prosecution of the company for 18 months to give Computer Associates time to show that it has cleaned up its act. Prosecutors said it marked the first time in any major corporate fraud case that the government has made such a move.

At a news conference in Washington, Deputy Attorney General James Comey said the deferral will ''give the company the opportunity to demonstrate that it has a culture that can be saved. Our focus is not on doing harm for harm's sake."

But he added: ''If they don't take those steps, the consequences will be severe."

The former chairman and chief executive , Sanjay Kumar, was charged with conspiracy and obstruction of justice in an indictment unsealed yesterday. Similar charges were brought against the former head of worldwide sales at Long Island, N.Y.-based Computer Associates, the country's fourth-largest software maker.

Through his attorney, Kumar said in a statement that he ''denies any wrongdoing and expects to be exonerated of all charges."

Robert Giuffra, an attorney representing Computer Associates, called the settlement a ''fair, balanced, and just resolution of this deeply disturbing matter."

He conceded that former executives ''betrayed the trust of the board, Computer Associates shareholders, and 15,000 employees."

In April, the company restated its financial results from 2000 and 2001 to reflect $2.2 billion in revenue that was improperly booked.

Prosecutors said the bookkeeping scheme, which they called ''a systematic, companywide practice of falsely and fraudulently recording and reporting" revenue, was intended to pump up quarterly earnings reports to meet analysts' expectations and bolster the company's stock price.