Computer Associates founder accused of fraud
Charles Wang, founder and former chairman of Computer Associations International Inc. ( now CA Inc.) has been accused of fraudulent accounting practices. A special committee of the board of directors has recommended that CA file suit against Wang to recover $500 million related to his conduct. The government has put the CA accounting fraud at $2.2 billion.
The CA committe found “credible evidence” that Wang participated in backdating contracts after quarters ended (referred to internally as “35-day months”). One particular example showed that a $32 million deal closed in July 1999, after the close of the company’s fiscal first quarter, was improperly included in first quarter revenue.
Eight former CA executives have pleaded guilty to charges related to the accounting fraud, but it appears unlikely that the findings of this committee will lead to criminal charges against Wang. This is primarily becuase of statute of limitations problems and a lack of documentation supporting such charges.
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