Computer Associates strikes $225M deal

The former CEO of Computer Associates International, the country’s third-largest software producer, was charged Wednesday with securities fraud in a multibillion-dollar accounting scandal, and the company itself agreed to pay $225 million to stave off criminal charges.

The government agreed to a first-of-its-kind deal to defer prosecution of the company for 18 months to give Computer Associates time to show that it has cleaned up its act.

At a news conference in Washington, Deputy Atty. Gen. James Comey said the deferral would “give the company the opportunity to demonstrate that it had a culture that could be saved.

“Our focus is not on doing harm for harm’s sake,” he said.

The former chairman and CEO, Sanjay Kumar, also was charged with conspiracy and obstruction of justice in an indictment unsealed Wednesday.

Real estate

Mortgage giant subject of federal investigation

Regulators have discovered serious accounting problems at mortgage giant Fannie Mae, prompting an inquiry by the Securities and Exchange Commission and calling into question its financial soundness, the company disclosed Wednesday. Its shares fell 7 percent.

The board of the government-sponsored company has named a special committee of outside directors to respond to a newly revealed accounting crisis at the second-largest U.S. financial institution behind Citigroup.

In a report made public Wednesday, federal regulators said they had found earnings manipulations, lax internal controls and a corporate culture “that emphasized stable earnings at the expense of accurate financial disclosures.”

Restaurant

Chi-Chi’s says ‘adios’

Chi-Chi’s, the Mexican restaurant chain, may have served its last chimichanga. Outback Steakhouse Inc. this week closed on its $42.5 million deal for the rights to 76 restaurants in the Chi-Chi’s chain, which was beleaguered by bankruptcy and a hepatitis outbreak.

Outback plans to convert many of the restaurants into its own brands, which include its signature Outback Steakhouse, Carrabba’s Italian Grills, Bonefish Grills, Fleming’s Prime Steakhouse and Wine Bars, Roy’s and Cheeseburger in Paradise restaurants.

The deal did not include Chi-Chi’s brand, its restaurant operations or any recipes, Outback officials said.

A statement posted on Louisville-based Chi-Chi’s Web site said, “We would like to thank all of our loyal customers of the past 27 years and with a tear in our eye, say adios.”