Welcome!

Java IoT Authors: Pat Romanski, Elizabeth White, SmartBear Blog, Charlotte Spencer-Smith, Ferhat Hatay

Related Topics: Java IoT, Microservices Expo

Java IoT: Article

Former CEO Sanjay Kumar Fingers CA Founder Charles Wang

CA Board Members Also Knew About the Massive Accounting Fraud & Cover-Up, Claims Kumar

From his cell in a federal prison in New Jersey, former CA CEO Sanjay Kumar has pointed an accusing finger at CA founder Charles Wang and said that Wang was the real author of the $2.2 billion accounting fraud that sent Kumar to jail for 12 years and nearly destroyed the company.

Kumar has said such things before but this time he also claims CA co-founder Russell Artzt, now its vice-chairman, was an active participant in CA's notorious "35-day months" and that one current and two former CA board members, including former US Senator Alfonse D'Amato, former Salomon Brothers vice-chairman Lewis Ranieri and former Audit Committee member Willem de Vogel, knew all about CA's practice of keeping its books open for five days or more past the end of the quarter so it could recognize some of the next quarter's software license revenues early and meet Wall Street's expectations.

He says they conspired to stonewall the government's investigation into the fraud and protect Wang.

Everybody denies the allegations. Newsday, CA's local paper, which broke the story, says Kumar's appeal of his prison sentence is supposed to be heard this month.

Kumar's accusations come a year into his stretch in a 27-page affidavit filed with a federal court in New York on August 27 on behalf of CA stockholder Sam Wily, who has been fruitlessly trying to get the court to reopen a shareholder class-action suit settled in 2003.

When CA bought Wily's company, Sterling Software, in 2000 it paid for it in conflated stock. A quarter later, when CA pre-announced, its stock price tanked. Wily has been seeking readdress ever since, twice kicking off a proxy fight to unseat CA's board.

His lawyers are now hoping Kumar's so-called new evidence will persuade the judge to reopen the case.

Kumar, however, claims that he told this story to CA's internal investigators in 2006 and 2007 but that his version of the events never made it into the Special Litigation Committee's report that was made public, which is kind of odd considering it accused Wang of fraudulent accounting and urged legal action.

"Fraud pervaded the entire CA organization at every level, and was embedded in CA's culture, as instilled by Mr. Wang, almost from the company's inception," it said.

It also described CA under Wang as a "one-headed dragon" and said "no significant decisions were made without his participation and approval."

CA thought at the time that it could make a $500 million claim against Wang, who was never charged by the government reported because of a five-year statue of limitations. It has reportedly also asked the court to reopen the stockholders' suit.

Anyway, Kumar says that when he went to work for CA in 1987 its 35-day month was "firmly entrenched" and "considered to be the way CA did business." He claims Wang "personally directed the implementation of this practice in my presence."

More to the point, Kumar claims that Wang, then still CA's CEO, personally directed him to bring in and backdate contracts for quarters Kumar is serving time for, including sending Kumar to Paris to close a deal with AXA.

Kumar also claims that "Wang insisted that CA stonewall the government, explaining that, if CA did so, the investigation would eventually ‘go away.'"

Kumar says D'Amato was "aware of Wang's participation in those practices...and told me on more than one occasion that it was best not to discuss Wang's involvement," warning him "Don't piss on the past," which Kumar calls "D'Amato's standard phrase for instructing me not to implicate Wang."

Kumar claims Raineri, then a member of the board's Audit Committee and eventually Kumar's replacement as chairman of CA, "instructed me not to divulge the full extent of the 35-day month practice to [Walter] Schuetze, the chair of the Audit Committee" because "Schuetze would have a heart attack" and "would ‘turn on us' if he found out."

Raineri reportedly told Kumar that CA had to "play hard ball" with the government and reportedly told CA's former head of worldwide sales Stephen Richards in Kumar's presence that if he took the Fifth or told the SEC the truth that he would be fired, but "as long as he was in the company, Ranieri would protect him."

Richards lied and is now serving a seven-year sentence for obstruction of justice and perjury.

D'Amato, given his connections, was allegedly supposed to fix CA's problems with the government and arrange a settlement.

Kumar says D'Amato brought in his buddy, Sullivan & Cromwell lawyer Robert Giuffra, to run an internal investigation when the government insisted on such a probe and that "Giuffra undertook conducting CA's defense against the government investigation to minimize the investigation's depth and any damage that might be done to D'Amato, Ranieri and Wang."

According to Kumar, from 1999 through 2003 Wang paid D'Amato's consulting firm $390,000 through The Smile Train, the Wang-established charity, to make up for the consulting fees from CA that D'Amato lost when he joined the CA board.

Kumar says he found out about the payments through an "anonymous source" and offers IRS filings demonstrating payments from Smile Train to Park Strategies LLP, D'Amato's company.

D'Amato is still on the CA board; everybody else except Artzt is gone.

Artzt supposedly told Kumar "that he questioned whether I should implicate Wang when asked by the government about CA's accounting practices. By the end of the conversation, however, Artzt thought it was best not to disclose the 35-day month practice or Wang's involvement. Artzt told me to remain silent because he thought that D'Amato would ‘get this fixed.'"

Kumar says Artzt, who like Wang was never charged, "played an instrumental role in persuading a number of CA customers to sign license agreements after the close of the quarter in which the revenue associated with the agreement would be recognized." He claims Artzt knew the contracts would be backdated.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
SYS-CON Events announced today that iDevices®, the preeminent brand in the connected home industry, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. iDevices, the preeminent brand in the connected home industry, has a growing line of HomeKit-enabled products available at the largest retailers worldwide. Through the “Designed with iDevices” co-development program and its custom-built IoT Cloud Infrastruc...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...