SEC/Justice Dept. probe Computer Associates' accounting irregularities
By Staff -- Manufacturing Business Technology, 3/1/2004 12:00:00 AM
Former Computer Associates Senior VP for Finance Lloyd Silverstein testified in Federal District Court in Brooklyn January 22 that he lied to federal investigators in September 2002 about the company's posting revenues from unsigned contracts in the year ending March 2000. In some quarters, the premature bookings represented as much as one-third of the company's sales, according to the Securities and Exchange Commission (SEC.). The joint SEC.-U.S. Department of Justice investigation asserts that the irregularities amounted to more than $1 billion.
Silverstein was one of three top financial executives, including CFO Ira Zar, forced to resign in October 2003 after an internal company investigation showed the company had booked sales prematurely. Silverstein also admitted to lying to the law firm CA had hired to investigate its own accounting practices. In admitting to the charges of accounting fraud, Silverstein said he lied to investigators after senior executives told him to do so. Roslyn R. Mauskopf, the top federal prosecutor in the case, stated that Silverstein's plea was only "the first step in uncovering a corrupt conspiracy," according to news sources.
In an official statement posted on the company's Web site, CA stated, "The Audit Committee and the Company are continuing their efforts to cooperate with the government's ongoing investigation and are committed to resolving these problems and putting these matters to rest.
