CA's Richards's Sentence Cut by Judge to Time Served for Securities Fraud

Stephen Richards, the former top sales executive at CA Inc. who was given a seven-year prison term after pleading guilty to securities fraud at the software company, was resentenced to time served.

U.S. District Judge I. Leo Glasser in Brooklyn, New York, resentenced Richards at a hearing today after an appeals panel reversed his original punishment. Richards, 45, participated in the hearing by phone from prison in Taft, California, which he entered on Feb. 27, 2007.

“The time that he served is sufficient given all that has transpired since sentence was imposed,” Glasser said.

The U.S. appeals court in Manhattan reversed Richards’s seven-year sentence in an Aug. 12 ruling. He and former CA Inc. Chief Executive Officer Sanjay Kumar pleaded guilty in 2006 to inflating revenue by backdating sales contracts as part of a $2.2 billion fraud. CA, based in Islandia, New York, was known as Computer Associates International Inc. when Kumar ran the company.

Richards told Glasser by phone how much his family means to him. “I will never again place them in a situation where they pay the price for my stupidity,” he said.

The appeals court affirmed Kumar’s and Richards’s convictions. It upheld Kumar’s 12-year sentence and reversed Richards’s sentence.

‘Acutely Aware’

Richards “is acutely aware, Your Honor, that he is the one who is responsible for the situation that he is in and that his family is in,” Richards’s lawyer, David M. Zornow, told Glasser before the judge imposed the sentence. Zornow is a partner at Skadden, Arps, Slate, Meagher & Flom LLP in New York.

The appeals court said Glasser failed to give Richards credit for accepting responsibility for his crimes. It said Kumar wasn’t entitled to a similar credit because his statement during his guilty plea and his objections to the facts of the case in the probation department’s sentencing report showed he didn’t accept full responsibility.

Kumar, 48, is serving his sentence at a federal prison in New Jersey.

Richards, a native of New Zealand, asked for two years to be sliced from his seven-year term, in part because his family is in Australia. He also said he has demonstrated his rehabilitation by participating in a program that refurbishes wheelchairs and by developing a 16-week course in entrepreneurship for inmates.

Assistant U.S. Attorney Jason Jones didn’t make a recommendation to Glasser.

“The crime hasn’t changed,” he said. “The man has.”

Restitution

In addition to the prison sentence, Kumar was fined $8 million and ordered to pay $798.6 million in restitution. He sold his 58-foot yacht, two Ferraris and investment accounts under an agreement with prosecutors to pay the first $50 million.

Richards was ordered to pay $29 million in restitution.

Richards pleaded guilty to conspiracy to commit securities fraud, securities fraud, false filings with the U.S. Securities and Exchange Commission, conspiracy to obstruct justice, obstruction of justice and perjury.

The case is U.S. v. Kumar, 04-CR-846, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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