Welcome!

Java IoT Authors: Yeshim Deniz, Carmen Gonzalez, Liz McMillan, Elizabeth White, Pat Romanski

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
The WebRTC Summit New York, to be held June 6-8, 2017, at the Javits Center in New York City, NY, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 20th International Cloud Expo and @ThingsExpo. WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, will share examples from a wide range of industries – includin...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
"We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...