Jacob Alexander, an ex-Comverse chief executive, has finally returned to America after years of being a fugitive. In 2006, while under investigation for backdating stock options, the Israeli-American businessman took a pre-planned annual vacation to Israel with his family and never returned to New York.
While in his native country, he transferred 40 million dollars from his personal U.S. bank account to his personal bank account in Israel. From Israel, he flew to Germany and later moved to Namibia, a nation, which has no extradition treaty with the US.
The founder of Comverse Technology and his family have been living the high life thanks to the promises and countless donations he made to the government. The mogul is considered as a criminal by authorities at the United States Department of Justice. They slapped him with a long list of charges including conspiracy to commit various types of fraud (including securities fraud, wire fraud, and mail fraud), as well as with related offenses, all relating to the timing of Comverse’s stock option grants.
However, in Namibia, he is a real model citizen and philanthropist. The Namibian government described him as follows:
“Alexander is very passionate about the country and its people; Alexander has promised to boost academic interest in science and technology in Namibia by establishing an annual scholarship for primary and secondary level students.”
He appeared in court numerous times in the African nation and always found a way to come out as a free man. This freedom came a steep cost and here is why:
“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.”
On Wednesday, with an army of lawyers by his side, Alexander stepped in a New York courtroom to face the music. The former chief executive officer of Comverse Technology Inc pleaded guilty to securities fraud, one single count. He had faced 35 of them. His lawyers fought for his release on a $25 million bond pending his December 16 sentencing. However, U.S. District Judge Nicholas Garaufis said no, and called Alexander a flight risk. Garaufis explained:
“His intelligence and his guile are a clear indication that he cannot be trusted.”
According to court documents:
“In backdating, a company retroactively grants stock options on dates when stock prices are lower, making them more valuable. Concealing the practice through improper accounting is illegal, and can inflate earnings.”
In court, Alexander apologized for his actions by saying:
“I deeply regret having participated in this conduct.”
One of Alexander’s attorneys said he returned:
“so he would have this nightmare behind him. Alexander’s effective exile forced him to attended his parents’ funerals by Skype.”
Alexander faces up to 10 years in prison. William Sorin, Comverse’s general counsel, and David Kreinberg, who had the role of finance chief in the company also faced the judge. Sorin pleaded guilty and was sentenced to one year in prison. Kreinberg was spared prison after pleading guilty.