Sanjay Kumar, the ex-CEO of CA Incorporated (NYSE:CA), was sentenced today to 12 years in prison and ordered to pay an $8 million fine for his role in the company's $2.2 billion accounting fraud. The primary concern was over the so-called "35-day month" scheme, which consisted of the company keeping its books open past the end of the quarter to realize additional revenue and meet Wall Street expectations. One person, testifying for immunity, also revealed that the company had regularly backdated contracts to manipulate sales - even going so far as to say that within the company, they referred to the practice as "the CA way".

The verdict comes after many years in the court system, tied up after the government agreed to a deferred prosecution agreement in 2004. The agreement soon went sour, however, after the fed discovered the company's executives were destroying evidence and lying to investigators. This led to additional obstruction of justice charges imposed on Kumar and other executives facing conviction. Investigators noted that they were very suprised at the number of senior executives who participated in the scheme or tried to cover it up. As one law enforcement official put it, "nearly every executive listed in the company's 2000 annual report ended up pleading guilty to something in the case".

Mentioned Executives
Sanjay Kumar