CA Inc.’s former head of worldwide sales, Stephen Richards, was formally ordered in federal court Tuesday to pay US$29.7 million in restitution to stockholders for his part in a major fraud scheme at the software company.
Richards, who is already serving a seven-year prison sentence for his part in the fraud, will pay US$29.5 million of the total once out of prison, at the rate of 15 per cent of his gross annual income at that time, according to the agreement reached in U.S. District Court in Brooklyn, a spokesman for the U.S. Attorney’s office said.
Of the US$250,000 that Stephens posted for bail while awaiting sentencing, US$200,000 will go toward the restitution fund, while US$50,000 will be returned to his wife Jane in Australia, according to court documents.
Richards had agreed to pay the restitution in papers filed on June 12. His restitution amount was based on an estimate of his involvement in the US$990 million loss to stockholders, and a reflection of Richards’ assets, according to the records. In all, Richards’ part was about 3 per cent of the loss of US$990 million.
Former CA chief executive Sanjay Kumar, who faces 12 years in prison, is responsible for US$798 million of the restitution, and must repay US$52 million by December 2008. Kumar is due to report to prison on Aug. 14, the spokesman said. After his release, he is required to repay the remainder of his debt at 20 per cent of his annual income.
CA was also charged with securities fraud and obstruction of justice in the same matter as Richards and Kumar for falsely recording software licensing revenues prematurely to boost financial results and then covering it up. All charges were dropped against CA in May, although CA has agreed to pay US$225 million into the restitution fund.
