Former CA sales head ordered to pay restitution

New Zealander Richards' part in fraud estimated at $US29.7 million

CA's former head of worldwide sales, expatriate New Zealander Stephen Richards, was formally ordered in US federal court earlier this week to pay US$29.7 million (NZ$39.5 million) in restitution to stockholders for his part in the 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% of his gross annual income at that time, according to the agreement reached in US District Court in Brooklyn, a spokesman for the US Attorney's office said.

Of the US$250,000 that Richards 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, originally from Upper Hutt, near Wellington, started his career with CA in Australia in the late 1980s and moved back to New Zealand in the early 1990s to head CA's operation here. In 1995 he became head of CA in Australia. In 1998, he moved to the US to take up a regional sales role and shortly afterwards became the company's global head of sales, based at its headquarters on Long Island near New York.

Richards 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 estimated at about 3% of the loss of $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 August 14. After his release, he is required to repay the remainder of his debt at 20% of his annual income.

CA was also charged as a company 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 last month, although CA has agreed to pay $225 million into the restitution fund.

Additional reporting by David Watson

Join the newsletter!

Error: Please check your email address.
Show Comments
[]