Waksal -- former head of biotech company Im Clone -- and domestic diva Martha Stewart, who will go to jail next month.USA Today has more details on the accounting problems at CA.
"Prosecutors said the bookkeeping scheme, which they called 'a systematic, companywide practice of falsely and fraudulently recording and reporting' revenue, was intended to pump up reported quarterly earnings to meet analysts' expectations and bolster the company's stock price.Prosecutors referred to one practice as the '35-day month' because company accountants would extend the booking of revenue in the final month of a fiscal quarter days beyond the true end of the month."The defendants are accused of perpetrating a massive accounting fraud that cost public investors hundreds of millions of dollars when it collapsed.Then they allegedly tried to cover up their crimes by lying," said Deputy Attorney General James B.
Comey, chair of the president's Corporate Fraud Task Force, in a statement.The Financial Times described the significance of the case: "The fraud charges, which include accusations against CA, cap the most widespread case of alleged accounting fraud to emerge from the technology bubble." "The indictment came as CA, one of the country's largest software makers, was also charged with obstruction and securities fraud but avoided an indictment after reaching a deferred-prosecution arrangement with the Justice Department. Kumar was named, along with former head of sales Stephen Richards, in a 10-count indictment yesterday. District Court in Brooklyn," the Wall Street Journal said, noting that through their lawyers, Kumar and Richards denied any wrongdoing.