Long stretch likely for Kiwi fraudster

Stephen Richards

Described as "a nice bloke" by a former employee, and an "average" student by a former classmate, New Zealander Stephen Richards is potentially facing a long stretch in jail for his role in a multi-billion-dollar scam in the United States.

Richards, 41, who attended Upper Hutt College from 1979 to 1983, pleaded guilty to securities fraud, perjury and obstruction of justice charges relating to a US$2.2 billion ($3.5 billion) accounting scheme at software company Computer Associates International (CA).

Richards, the former head of sales at the company, appeared in a US District Court in Brooklyn, New York, on Tuesday. He was released on US$5 million bail.

Former CA chief executive Sanjay Kumar, 44, also pleaded guilty to the same charges.

According to the indictment, Kumar, who left the company in 2004, improperly booked software licence revenue from 1999 to 2000 in order to meet Wall St analysts' quarterly earnings expectations and then lied to investigators about it.

The pair initially pleaded not guilty in September 2004 and had been scheduled to go on trial on May 8.

Prosecutors would not comment on why the men changed their plea, but noted another ex-CA executive, Tommy Bennett, was arrested and charged last week for his role in the scheme.

Each count in the indictment carries a maximum sentence ranging from five to 20 years. Sentencing is set for September 12.

A former employee of Richards', who didn't want to be named, worked for him at CA in Sydney in the 1990s.

"I worked for him from 1995 when he took over as [regional] managing director of CA until he left for the United States around 1999 or 2000."

He was a pretty outgoing guy and a "good bloke", said the man, who no longer works at CA.

"I thought he was a good managing director, he inspired the troops pretty effectively.

"He was pretty much the anointed one to work with Sanjay Kumar, who was the right-hand man of Charles Wong, the founder of CA."

He said Richards quickly lifted CA's operations in Australia and New Zealand, after years of unspectacular performance and that must have caught the attention of the Americans.

Richards split up from his wife, with whom he has a child, soon after moving to Australia, then re-married and had children after moving to the US.

A former classmate at Upper Hutt College, who also didn't want to be named, said Richards had been an "average" student.

"I actually sat beside him in seventh form economics and the two of us didn't pay much attention to the teacher.

"He was just one of the average students, he wasn't a recluse in the corner, but by the same token he wasn't one of those rated at the top of the class."

- NZPA