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Former CA Chief 'Masterminded Fraud'

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By David Perera April 16, 2007

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A culture of corruption pervaded the security software company and government contractor CA Inc. almost from its inception, according to a report issued by the company's corporate board Thursday.

According to the report, founder and former CEO Charles Wang oversaw “accounting fraud lasting more than a decade at the software company,” once known as Computer Associates, reports The New York Times.

CA, which makes network management software, was 46th on Government Executive’s list of top 2005 federal technology contractors. It captured $117,763,017 worth of federal contracts in fiscal 2004, or 0.25 percent of the federal technology market. CA did not rank in the top 50 during fiscal 2005.

Wang’s successor, Sanjay Kumar was sentenced to12 years in a federal prison and agreed last week to pay $800 million in restitution to stockholders who lost money when it was revealed the company overstated earnings.

Wang has not been indicted, but the CA board charges he “masterminded accounting gimmicks that led his company to report inflated sales and profits,” the Times reports. CA “is still struggling to rebuild the trust of employees and shareholders, the report says. ...'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,' according to the CA board."

In a statement, Wang called the report "fallacious" and blamed Kumar for the company's woes.

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