## Facts

- Computer Associates (CA), a publicly traded software company, engaged in a multi-year accounting fraud that inflated quarterly results by keeping books open after quarter-end and recording late contracts as revenue for the closed quarter.
- Sanjay Kumar, CA’s CEO (later chairman), participated in the fraudulent scheme and related misconduct charged by the government.
- Stephen Richards, head of North American sales, participated in revenue-target practices and later gave statements during a joint SEC–U.S. Attorney’s Office interview that the government alleged were materially false and misleading.
- A grand jury charged Kumar and Richards with multiple offenses, including conspiracy, securities fraud, wire fraud, obstruction of justice, and perjury-related counts.
- Both defendants pleaded guilty pursuant to plea agreements.
- At sentencing, the district court applied the 2005 Sentencing Guidelines Manual, denied both defendants a reduction for acceptance of responsibility, and imposed below-Guidelines sentences with substantial restitution (Kumar: 144 months and $800 million; Richards: 84 months and $29 million).

## Issues

1. Whether the obstruction-of-justice count against Richards sufficiently alleged a violation of 18 U.S.C. § 1503 by connecting false statements to the due administration of justice.
2. Whether Richards’s guilty plea was involuntary due to alleged governmental coercion, in violation of the Fifth Amendment.
3. Whether use of the 2005 Sentencing Guidelines Manual, rather than the manual in effect during the fraud conduct, violated the Ex Post Facto Clause.
4. Whether the district court erred in denying acceptance-of-responsibility reductions under U.S.S.G. § 3E1.1 to Kumar and Richards.
5. Whether the district court’s loss findings and resulting restitution orders were erroneous.

## Decision

- The court affirmed Kumar’s conviction and sentence in all respects.
- The court affirmed Richards’s conviction and rejected his challenges to the indictment’s sufficiency and the voluntariness of his plea.
- The court held that applying the 2005 Guidelines as advisory did not violate the Ex Post Facto Clause.
- The court affirmed the denial of acceptance-of-responsibility credit as to Kumar.
- The court vacated Richards’s sentence in part and remanded for resentencing because the denial of acceptance-of-responsibility credit to Richards was erroneous.
- The court affirmed the district court’s loss determinations and restitution methodology for both defendants.

## Legal Principles

- 18 U.S.C. § 1503’s omnibus clause reaches corrupt efforts to obstruct the due administration of justice when the conduct bears a sufficient “relationship in time, causation, or logic” to an actual or reasonably foreseeable federal judicial proceeding; false statements in a joint SEC–USAO interview connected to a criminal investigation can satisfy this nexus.
- A guilty plea is valid if knowing, voluntary, and intelligent; a defendant’s sworn Rule 11 statements that the plea is unforced and informed carry a strong presumption of truth and are not set aside absent compelling contrary evidence.
- In an advisory-Guidelines regime, calculating the Guidelines range under a later manual does not, by itself, violate the Ex Post Facto Clause where the court treats the Guidelines as nonbinding and sentences under 18 U.S.C. § 3553(a).
- Acceptance-of-responsibility determinations under U.S.S.G. § 3E1.1 receive substantial deference on appeal, but reversal is warranted when the record shows genuine acceptance and the denial rests on misapplication of the guideline criteria.
- For complex fraud, loss and restitution may be based on a reasonable estimate grounded in reliable evidence; exact precision is not required.

## Conclusion

The Second Circuit upheld the convictions and nearly all sentencing rulings arising from CA’s accounting fraud, including the obstruction charge tied to a joint SEC–prosecutor interview, the use of the 2005 advisory Guidelines, and large restitution orders, but remanded solely to resentence Richards with an acceptance-of-responsibility reduction.


United States v. Kumar, 617 F.3d 612 (2d Cir. 2010)