Jacob “Kobi” Alexander, the former CEO of Long Island software firm Comverse Technology who fled to Africa to avoid fraud charges, was sentenced Thursday in Brooklyn federal court to 30 months in prison.
Alexander, 64, an Israeli citizen who founded digital voicemail pioneer Comverse in 1982, returned last year to plead guilty to securities fraud after fleeing to Namibia in 2006 to evade prosecution for backdating stock options and trying to bribe an underling to take the fall.
“I really don’t understand how someone as brilliant and accomplished and focused and respected as you could be so incredibly, abjectly foolish as to make some of the decisions you made,” said U.S. District Judge Nicholas Garaufis.
Alexander claimed in a letter to the judge that he fled out of fear of a draconian sentence for a white-collar crime and fought extradition for a decade because he was “terrified” by seeing his name on a Most Wanted list with Osama bin Laden.
In brief remarks before the sentence was announced, Alexander, who has been jailed since his return to the U.S. last August, asked for leniency, telling the judge in a quiet voice that he was “truly sorry.”
“I deeply regret my decision to run away instead of dealing with the justice system like I should have,” he said. “I have nobody to blame but myself. . . . I have always been an honorable man, but on these matters I acted without honor.”
Alexander, who started the Woodbury software firm in 1982, disappeared and surfaced in Namibia in 2006 just before he was accused of backdating options for himself and other executives from 1998 to 2001 without disclosing the practice in annual reports.
When he fled, he allegedly misled his own lawyers and the government about his plans to return and secretly moved $50 million overseas. He was also charged with obstruction for offering another executive a bribe to take responsibility for the scheme.
Two other Comverse officials eventually pleaded guilty. Although Alexander never cashed in his options, prosecutors said the scheme cost the company $51.8 million and led to its delisting as a publicly traded company, reducing the market capitalization by $800 million.
The 2 1⁄2-year prison term exceeded by 6 months the longest previous sentence in the U.S. for options backdating, but as part of the deal to get him to return prosecutors dropped obstruction of justice and bribery charges, and they never charged Alexander over his flight.
The father of three, whose family and friends filled the courtroom, is worth $100 million and lived comfortably on a golf course in Namibia, according to prosecutors. Defense lawyer Ben Brafman said he lived a modest lifestyle and gave generously to needy Namibians.
Brafman urged a term of just 18 to 24 months, insisting Alexander returned “voluntarily” to face charges, but Garaufis called that claim laughable.
The judge said Alexander cut a deal to return to Brooklyn because he eventually wants to go home to Israel and not live out his life in Africa. Garaufis said he hopes the 30-month sentence will deter other wealthy criminals from running.
“Corporate executives must know that they can’t flee the jurisdiction to escape the criminal process,” he said.
Alexander’s plea deal prohibited the government from seeking any financial penalties beyond the $60 million he has paid to settle civil claims relating to the options backdating.