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For copies of the records addressed in the article below, submitted to the United States District Court for the Eastern District of New York in relation to Barroway v. Computer Associates International, Inc., et al, 98-cv-4839, 02-cv-1226; Federman et al v. Artzt et al, 03-cv-4199; Computer Associates International, Inc., Derivative Litigation, 04-cv-2697; and Sam Wyly & Ranger Governance, Ltd. v. CA, Inc. & Sterling Software, Inc., 05-cv-4430, see

For previous reports concerning payments by Charles Wang's Smile Train to Alphonse D'Amato's Park Strategies, as addressed in pages 17-19 of the Kumar Declaration and its referenced Exhibit G tax records (above), see

For a copy of the minutes of the 2003 board meeting referenced in the Kumar Declaration's statements on pages 22-24 about Mr. D'Amato's control of the company's response to government prosecutors, see


Bloomberg, September 4, 2008 article



CA Founder Wang `Personally Directed' Fraud, Ex-Chief Says

By Patricia Hurtado

Sept. 4 (Bloomberg) -- CA Inc. founder Charles Wang ``personally directed and implemented'' a $2.2 billion accounting fraud, said former Chief Executive Officer Sanjay Kumar, who is serving a 12-year prison term for the scheme.

Kumar, 46, made the claim in an affidavit filed in federal court in Central Islip, New York, by lawyers for billionaire investor Sam Wyly, who runs Dallas-based Ranger Governance. Wyly and Ranger Governance are plaintiffs in a 2002 shareholder lawsuit filed against the Islandia, New York-based software maker, formerly known as Computer Associates Inc.

Kumar, who pleaded guilty in 2006 to eight counts including securities fraud, conspiracy and obstruction of justice, said a practice of inflating revenue, known as the ``35-day month'' in which the company backdated quarterly sales contracts, was ``firmly entrenched'' under Wang.

This practice ``was considered to be the way CA did business,'' Kumar said in the 27-page affidavit filed Sept. 2. ``Charles Wang who co-founded and ran CA from before that time personally directed the implementation of this practice.''

Kumar, who is serving his term in a federal prison in Fairton, New Jersey, also claimed that Lewis Ranieri, CA's former chairman, and board member Alfonse D'Amato, a former U.S. senator, ``had knowledge'' that contracts were booked late and ``took steps to protect Wang and conceal the facts.''

Wang, Ranieri and D'Amato haven't been charged with wrongdoing by federal prosecutors who investigated the case. Robert Nardoza, a spokesman for Brooklyn U.S. Attorney Benton Campbell, declined comment on Kumar's claims.

Allegations `False'

``These allegations are false,'' Lewis Liman, a lawyer for D'Amato and Ranieri, said yesterday in a phone interview. ``Mr. Kumar has pleaded guilty to lying to the company's board, its lawyers and its investors. It is regrettable that from jail, Mr. Kumar continues to be a stranger to the truth.''

Andrew Frank, a spokesman for Wang, 63, declined comment. Wang said last year in a statement that he fully cooperated with the government in its investigation and was ``devastated'' by the fraud. He said at that time that he felt ``personally wronged by Sanjay Kumar and the management team he installed.''

Wyly and his lawyers have asked U.S. District Judge Thomas Platt, who is presiding over the case, for a hearing on the matter. Last year, they asked Platt to vacate a 2003 shareholder settlement reached in the case based on ``newly discovered evidence.'' Platt denied the request and affirmed the 2003 settlement in August 2007. That decision is being appealed to the 2nd U.S. Circuit Court of Appeals, records show.

`New Evidence'

``We write to you today to inform you of new evidence,'' William Brewer, a lawyer for Wyly and Ranger Governance, said in a Sept. 2 letter to the court. ``It is troubling that the facts contained in the declaration have never been publicly disclosed or put before the court.''

Brewer didn't return a voice-mail message left at his office seeking comment.

CA's Special Litigation Committee said last year that it planned to sue Wang to recover some of the $1 billion it paid the founder, Kumar and other executives. In the report, the committee recommended suing Wang to recoup at least $500 million in damages related to the fraud.

The committee wrote that CA was known as a ``one-headed dragon'' while Wang led the company and that ``no significant decisions were made without his participation and approval.''

Wang's Role

The committee found that Wang encouraged and participated in the fraudulent practices, according to the report. The company filed a request to re-open the matter. In November, Platt denied the CA committee's request to re-open the settlement, saying the legal deadline for such a request had expired. Robert Giuffra, a lawyer for the committee, didn't return a voice-mail message after business hours.

The statement by Kumar contains some discrepancies. He said Ranieri knew of the booking practice when he was on CA's board in October 2000. Company records show Ranieri didn't join the board until June 2001.

Kumar also blamed wrongdoing in transactions involving one company on other CA executives. U.S. prosecutors, in their sentencing memo to the court, said Kumar directed those transactions.

Kumar also said he informed the committee of his claims and said it sought to minimize ``any damage done to D'Amato, Ranieri and Wang.''

CA spokesman Dan Kaferle said the committee conducted at least 90 interviews that included Kumar and other executives. The committee also reviewed millions of pages of documents, Kaferle said.

``Every Effort'

``The Special Litigation Committee made every effort to investigate and corroborate the information used for its report, and directed the company to take action based on that report,'' Kaferle said yesterday. ``In a matter of this complexity, one cannot draw conclusions from the uncorroborated recollections of a single individual.''

Kumar's attorney, Lawrence McMichael, couldn't immediately be reached for comment.

D'Amato, now a radio commentator for Bloomberg News, didn't return a voice-mail message left at his office after business hours yesterday and an assistant said he was traveling. Ranieri also didn't return a voice-mail message left at his office after business hours yesterday.

The case is In re Computer Associates 2002 Class Action Securities Litigation, 02-CV-01226, U.S. District Court, Eastern District of New York (Central Islip).

To contact the reporter on this story: Patricia Hurtado in federal court in Brooklyn at

Last Updated: September 4, 2008 00:01 EDT





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