Former Computer Associates (now CA) international sales director Stephen Richards has been formally ordered by a US federal court to pay $29.7-million in restitution to shareholders for his part in the nearly $1-billion fraud that rocked the software group almost two years ago.
The fraud, for which Richards is currently serving a seven-year jail term and which saw former CEO Sanjay Kumar sentenced to 12 years in prison and ordered to pay $798-million in restitution, has become notorious for what is now known as the "35-day month" whereby licensing figures were manipulated to enhance the company's share price.
Computerworld reports that Richards will pay $29.5 million of the total once out of prison at the rate of 15% of his gross annual income at that time. Of the $250 000 that Stephens posted for bail while awaiting sentencing, $200 000 will go toward the restitution fund, while $50 000 will be returned to his wife Jane in Australia.
Richards' restitution amount, Computerworld says, was based on an estimate of his involvement in the $990-million loss to stockholders and a reflection of his assets. In all, Richards' part was about 3%.
Kumar, who is due to report to prison on 14 August, is responsible for $798-million of the restitution and must repay $52-million by December 2008. After his release, he is required to repay the remainder of his debt at 20% of his annual income.
CA was also charged with securities fraud and obstruction of justice in the same matter for falsely recording software licensing revenues prematurely to boost financial results and then covering it up, but all charges were dropped against it in May. The company has, however, agreed to pay $225-million into the restitution fund.