Former Tech Company CEO Who Fled Country Sentenced in Fraud Scheme

The former chief of an Israeli technology firm who had eluded U.S. authorities for more than a decade before his extradition last year was sentenced Thursday to nearly three years in prison for his role in a lucrative fraud scheme.

In what authorities said was the heaviest penalty ever handed down for a stock option backdating scheme, Jacob “Kobi” Alexander was ordered to serve 30 months in prison during his sentencing at U.S. District Court in Central Islip Thursday.

Alexander’s punishment follows his guilty plea in September for a securities fraud scheme dating back nearly two decades. He was indicted more than 10 years ago but had fled to Namibia, a country in southwest Africa, with his family, to evade prosecution, authorities said.

Federal prosecutors said Alexander, the former CEO of Comverse, which was traded on the NASDAQ 100, operated a fraudulent backdating scheme and subsequently lied to investors in public filings. Comverse had offices in Woodbury.

The scheme went on from 1998 to 2006, authorities said. By backdating stock options, Alexander and his alleged co-conspirators made tens of millions in profits by selecting issuance dates when Comverse stock was trading lower. This allowed Comverse to inflate the amount of its profits and also violated the company’s shareholder-approved stock option plans, authorities said.

Alexander’s plan to escape legal scrutiny included an attempt to bribe a witness into making false statements and abruptly fleeing the country, authorities said. Alexander was extradited from Namibia last year.

“I deeply regret having participated in this conduct,” Alexander reportedly said back in September.

In a statement, Robert Capers, U.S. Attorney for the Eastern District of New York, said Alexander’s conviction and sentence “should send a powerful message to high-ranking executives that corporate rank is no shield to criminal liability.”

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