Beleaguered Computer Associates (NYSE:CA), maker of corporate computer systems management software, announced fourth-quarter 2004 earnings yesterday after the close. Revenue increased 10% to $850 million from a year earlier. Net earnings turned around to a profit of $89 million, or $0.15 per share, from a year earlier loss of $106 million, or $0.18 per share.

The interim CEO was upbeat about the company's prospects as deferred revenue from subscriber bookings increased 33%. But the specifics for the company's outlook are modest with management calling fiscal 2005 an "investment year." It's expecting sales of $865 million to $885 million and earnings of $0.17 to $0.19 per share. But comparisons will be difficult due to a number of accounting changes, presumably correcting earlier problems and improving clarity.

But speaking of clarity, it's far from in the clear over past accounting indiscretions. It's highly unlikely that it will get off the hook for the paltry $10 million it offered the government yesterday to settle the investigation into shenanigans dating back to 2000. That amount is peanuts compared to the $2 billion in revenue it booked inappropriately or compared to what the recently ousted CEO Sanjay Kumar received in compensation during his corrupted tenure. The company had the highest paid CEO in the country in 1999 and was later sued by shareholders (and lost) over an unusual compensation package. Executives were forced to return $550 million.

This is a company that is severely tainted by past greed on the part of its executives. By some estimates it could have to pay the government as much as $100 million to $200 million. Despite the fact that sales appear to be improving, I wouldn't want to be holding the stock when a final judgment is announced. That's a risky proposition. It's the often-subtle difference between investing and gambling. In owning such a stock, you're essentially betting on the unknown outcome of a significant government investigation that is overshadowing its business.

There are better places to think about putting your money in the IT software and services sector with companies that aren't scandal plagued such as Computer Sciences (NYSE:CSC), IBM (NYSE:IBM), or Hewlett-Packard (NYSE:HPQ).

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Fool contributor Mark Mahorney doesn't own shares of any companies mentioned.