Fugitive executive caught in Namibia

September 28, 2006|By Bloomberg News

NEW YORK -- Jacob "Kobi" Alexander, the former Comverse Technology Inc. chief executive officer who became a fugitive after being charged with securities fraud, was arrested yesterday in Namibia.

Alexander, the former Israeli intelligence officer turned high-tech entrepreneur, will be brought before a court in Windhoek, Namibia, within 48 hours, and the United States will seek his extradition, the Justice Department said.

Federal prosecutors charged Alexander, 54, Aug. 9 with backdating stock options to boost the compensation of executives at Comverse, the world's largest maker of voice mail software.

A 32-count indictment unsealed yesterday by U.S. District Judge Nicholas Garaufis in Brooklyn, N.Y., charged Alexander with crimes relating to an alleged "slush fund" and the backdating of stock options from 1998 to 2006. He is charged with conspiracy, securities fraud, making false filings with the Securities and Exchange Commission, mail fraud, wire fraud and money laundering.

Alexander, who has been called the wizard of Israel's technology boom, was arrested by Interpol and local police on a Namibian warrant issued at the request of the United States, said Ray Castillo, a spokesman for the U.S. Embassy in Namibia.

Namibia amended its laws governing extradition effective today to allow the rendering of fugitives to the United States, according to a letter from Brooklyn U.S. Attorney Roslynn Mauskopf's office filed in federal court.

The probe of backdating at Comverse has triggered the widest-ranging fraud charges to date from the more than 130 inquiries launched by regulators, prosecutors or companies into stock-options timing. Options backdating, used to reward employees with shares granted at below-market prices, has so far cost investors at least $7.9 billion in market value, according to Bloomberg data.

Alexander's subordinates, David Kreinberg, Comverse's former chief financial officer, and William Sorin, a former general counsel, also were charged last month and each was released on $1 million bail. The three were charged in a criminal complaint July 31 with changing the dates on millions of Comverse stock options so employees, including themselves, could buy shares at low prices.

Kreinberg, 41, and Sorin, 56, pleaded not guilty, but Linda Lacewell, an assistant U.S. attorney, told Garaufis that her office was attempting to negotiate plea agreements with them.

Kreinberg's lawyer, Matthew Lang, declined to comment, and Lewis Clayton, an attorney for Sorin, couldn't be reached.

Since Alexander was charged, the FBI has put his face on its Most Wanted list and Interpol has sent out a global "red notice," asking police to arrest the former CEO. Prosecutors said yesterday that Alexander isn't a U.S. citizen as the FBI stated in a press release after he was charged. Robert Nardoza, a spokesman for Mauskopf, said the former CEO, a citizen of Israel, is a permanent resident of the United States.

Alexander wired $57 million to Israel in July from an account at Citigroup Inc.'s Smith Barney unit, the U.S. government said, calling the transfer an effort to "launder the proceeds of the fraud." His assets in two Citigroup Smith Barney accounts were frozen July 31.

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