Jacob “Kobi” Alexander, the former chief executive of a Long Island-based technology company who fled the United States after he was charged with masterminding a multimillion-dollar stock option fraud, is expected to face justice after 10 years in Namibia.
Alexander, 64, will plead guilty Wednesday in federal court in Brooklyn to one count of backdating stock options, his attorney, Benjamin Brafman, said in an email Monday.
The former head of Comverse Technology, which was headquartered in Woodbury but moved to Manhattan after Alexander fled the country, “has decided to voluntarily return to the United States to address and resolve his remaining outstanding legal issues,” Brafman said.
He is due to enter a plea before Judge Nicholas Garaufis in the Eastern District of New York, a federal court spokeswoman said.
Brafman said he does not know what sentence Alexander can expect. Prosecutors declined to comment.
Alexander was at the helm of Comverse when he was charged criminally in federal court with conspiracy, wire fraud, money laundering and obstruction of justice. He made as much as $138 million by selling backdated company stock options from 1991 to 2001, according to news reports. Federal prosecutors charged he tried to get another, unspecified person to take the blame for the alleged scheme by offering a bribe of as much as $5 million or more, eventually telling the person, “name your price.”
Comverse provides technology for telecommunications.
Comverse’s general counsel, William Sorin, was sentenced to a year and a day in prison, and he agreed to pay $3 million in a settlement with the Securities and Exchange Commission. Chief financial officer David Kreinberg was sentenced to time served, which amounted to several hours he spent in custody after his 2006 arrest, Edward McDonald, Kreinberg’s attorney, said. Kreinberg also agreed to pay $2.4 million in an SEC settlement.
Comverse and Alexander agreed to pay $225 million in 2009 to settle a class-action lawsuit by shareholders and other litigation.
Comverse was a pioneer in voicemail technology, said Scott Sutherland, a founding member of Telegraph Hill Advisors, who covered the company as a stock analyst in the 2000s. Comverse was “probably one of the more egregious” offenders among companies accused of backdating stock options, Sutherland said.
The practice could be compared with “gambling on last week’s races,” said John C. Coffee Jr., a professor at Columbia Law School who focuses on white collar crime. For instance, a company whose stock was trading at $12 per share might give an executive the option to buy stock at the price it fetched a few months before — say, $10 per share.
“You’ve built in a $2 [per share], immediate gain,” Coffee said.
Verint Systems Inc., based in Melville, was once a Comverse subsidiary, and became independent in 2013. A spokesman for Verint said in an email, “today there is no relationship between Verint and Comverse.”