Computer Associates Ex-Execs May Plead Guilty to Criminal Charges

Three former top finance executives at Computer Associates International Ltd., the software company facing federal probes of its accounting, will plead guilty to unspecified criminal charges today, court and prosecution officials said Wednesday.

An official working for U.S. District Judge I. Leo Glasser in Brooklyn said that the executives, including former Chief Financial Officer Ira Zar, would be arraigned today and that guilty pleas would be entered.

“They are pleading guilty, all three of them,” said Robert Nardoza, a spokesman for the U.S. attorney’s office in New York, who was reading off a court calendar that did not specify the charge or charges.

A person familiar with the matter said the charges against one of the three, former Senior Vice President of Finance David Kaplan, included conspiracy to obstruct justice and securities fraud.

Also facing charges is another former senior vice president of finance, David Rivard. He declined to comment. The other two former executives could not be reached.

Two federal probes, one by the Securities and Exchange Commission and the other by the Justice Department, have been examining Computer Associates’ accounting for two years.

The Islandia, N.Y.-based company has received a Wells Notice from the SEC, an indication that the regulator may soon take civil action against the company.

In the criminal case, the Justice Department has said that a January guilty plea to obstruction of justice by another former finance executive, Lloyd Silverstein, was the first step in uncovering “a corrupt conspiracy ... to thwart and obstruct the investigations” into the company.

Zar was the most senior person at the company to have been implicated in the matter.

Computer Associates would not comment on the court case. Walter Schuetze, a board member at the company and former SEC chief accountant who is leading the internal investigation, also declined to comment.

All three of the executives left Computer Associates late last year. Rivard and Zar were asked to resign in October because of the accounting probe. Kaplan resigned in December for personal reasons, a company spokesman said Wednesday.

Obstruction of justice carries a maximum sentence of 10 years in prison. A person convicted of securities fraud could face to up to 25 years.

Computer Associates shares fell 7 cents to $27.91 on the New York Stock Exchange.