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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,
was sentenced to 2-1/2 years in prison on Thursday for engaging
in securities fraud.
Jacob “Kobi” Alexander, the Woodbury, New York-based
software developer’s founder, was sentenced by U.S. District
Judge Nicholas Garaufis in Brooklyn, who had said the former
executive could not be trusted when he pled guilty in
Lawyers for Alexander, 64, had sought a prison term of no
more than two years for the Israeli citizen, who has spent six
months in custody after Garaufis rejected his request for
release on a $25 million bond. Alexander is likely to be
credited for the time he was held.
In a letter to the court, Alexander had 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 countered that Alexander’s
flight warranted a “substantial sentence.”
Alexander had faced 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
The case is U.S. v. Alexander, U.S. District Court, Eastern
District of New York, No. 06-cr-00628.
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