Ex-Comverse CEO who fled to Namibia faces U.S. fraud sentencing

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By Nate Raymond | NEW YORK

NEW YORK The former chief executive officer of
Comverse Technology Inc, who returned to the United States last
year after spending a decade in Namibia to avoid prosecution, is
scheduled to be sentenced on Thursday for engaging in securities
fraud.

Jacob “Kobi” Alexander, the Woodbury, New York-based
software developer’s founder, is expected to be sentenced by
U.S. District Judge Nicholas Garaufis in Brooklyn, who said the
former executive could not be trusted when he pled guilty in
August.

Lawyers for Alexander, 64, are seeking a sentence of no more
than two years in prison for the Israeli citizen, who has spent
six months in custody after Garaufis rejected his request for
release on a $25 million bond.

In a letter to the court, Alexander urged Garaufis to
consider the “good things” he did while living in Namibia and
apologized for fleeing.

“I know I should have come back sooner but I could not bring
myself to face the consequences of my actions,” he wrote.

But prosecutors in court papers argued Alexander’s flight
warrants a “substantial sentence.” He faces up to 10 years in
prison.

The case was one of the last open U.S. prosecutions arising
from government or internal investigations of backdating of
stock options at over 200 companies, including Comverse, which
was acquired in 2013 by former unit Verint Systems Inc.

In backdating, a company retroactively grants stock options
on dates when stock prices were lower, making them more
valuable. Concealing the practice through improper accounting is
illegal, and can inflate earnings.

Prosecutors said that from 1998 to 2001 Alexander
participated in a scheme to use hindsight to select the
effective dates for granting options for employees, resulting in
misleading statements to investors.

Alexander fled to Namibia with his family in July 2006 amid
the investigation, prosecutors said. Charges were announced that
August against him, William Sorin, Comverse’s general counsel,
and David Kreinberg, its finance chief.

Sorin pleaded guilty and was sentenced to one year in
prison. Kreinberg was spared prison after pleading guilty.

While abroad, Alexander agreed in 2009 to pay $60 million to
Comverse in connection with shareholder litigation, and to waive
over $72 million in claims he had against Comverse.

He settled related civil government lawsuits in 2010,
resulting in a $6 million penalty by the U.S. Securities and
Exchange Commission.

The case is U.S. v. Alexander, U.S. District Court, Eastern
District of New York, No. 06-cr-00628.



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