Ex-CA founder blamed for starting fraud

NEW YORK (CNNMoney.com) -- Founder and former CA Chief Executive Charles Wang has been accused of leading and participating in accounting fraud at the computer software company, a board committee's report showed Friday, according to a report published online.

The Wall Street Journal's online edition reported that a special committee of the company's board of directors recommended CA (Charts) file suit to recover $500 million in expenditures in relation to damages caused by Wang during the 80s and 90s. The payment would include a $225 million in restitution to investors, according to the report.

Wang's successor, Sanjay Kumar, agreed to pay nearly $800 million in restitution to victims for orchestrating accounting fraud at CA. Kumar was sentenced to 12 years in federal prison last November and will also be required to pay 20 percent of his annual income after he is released.

The committee filed a report on the accusations against Wang in a Delaware court Friday, the Journal said. The online publication said the report is the first publicly tying Wang to the $2.2 billion accounting fraud at the Islandia, N.Y.-based company, formally known as Computer Associates.

Wang is not among the eight former executives who have pleaded guilty or reached settlements for fraudulent accounting, the Journal said.

Wang stepped down as chief executive in 2000 and resigned as chairman in 2002.

The Journal story quoted a statement from Wang saying he is "appalled" by the "fallacious" report, and that he intends to defend his name and lay the blame for the fraud squarely on Kumar.

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