Its official, the FBI has declared Kobi a fugitive:
F.B.I. Calls Ex-Comverse Chief a Fugitive, and Casts a Wide Net
By JULIE CRESWELL
Published: August 16, 2006
Where in the world is Kobi?
The hunt for Jacob Alexander, known as Kobi, was stepped up yesterday after the Federal Bureau of Investigation declared him a fugitive and said agents were seeking his arrest.
The former chief executive of the communications software company Comverse, Mr. Alexander, 54, was charged last week by federal prosecutors in Brooklyn with conspiracy to commit securities fraud. He and two other former Comverse executives were charged in connection with their suspected involvement in a stock options scheme that, prosecutors said, used a “secret slush fund” to dole out options to favored employees.
Two of the former executives showed up at their arraignment last week, but Mr. Alexander did not.
The F.B.I. also said yesterday that a “red notice’’ was issued for Mr. Alexander with the international police organization Interpol. Such notices alert countries that an arrest warrant has been issued.
A lawyer for Mr. Alexander, Robert G. Morvillo with Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer said yesterday that he had not spoken with Mr. Alexander for at least two weeks. Mr. Morvillo said that he believed at the time that Mr. Alexander and his family were on vacation in Israel — a trip they normally take in the summer.
Described by the F.B.I. as 5 feet 8 inches tall with green eyes, Mr. Alexander has roots in Israel. He has dual United States and Israeli citizenship and he helped found Comverse in Israel in the early 1980’s before moving its headquarters to Long Island. A significant amount of Comverse’s research-and-development base remained in Israel, where it is viewed as a darling among the Israeli high-tech industry.
Furthermore, in the last two weeks of July, just before charges were filed, Mr. Alexander wired about $57 million from accounts in the United States to an account in Israel. Federal prosecutors have frozen the remaining amounts in the accounts here in the United States — estimated to be around $45 million. When asked if he was still representing Mr. Alexander, Mr. Morvillo said he had not been discharged by his client. “We’re in a peculiar circumstance,” Mr. Morvillo noted. “We have not been able to reach our client at the usual numbers we have for him.”
If Mr. Alexander is indeed discovered by the authorities to be in Israel and is unwilling to return to the United States, the process to extradite him could be tricky, said Richard Bierschbach, an assistant professor at the Benjamin N. Cardozo School of Law in New York.
“While we have an extradition treaty with Israel and chances are good crimes like this — major financial fraud — are covered by it, extradition is not only a legal process but it’s also a political process,” Mr. Bierschbach said. “If he is a gigantic superstar over there, Israel could drag its feet on this.”
Mr. Alexander, along with David Kreinberg, the former chief financial officer, and William F. Sorin, the former general counsel, are accused of manipulating stock options granted by the company’s directors from 1998 to 2001. According to prosecutors, the three made a combined $8.4 million in profits by changing the grant date on the options to a time when Comverse’s stock was trading at a lower price.
Options give an employee the right to buy a stock at some point in the future at the price of the stock on the day it was granted, commonly referred to as the strike price. The lower the strike price, the more an option is worth to the recipient.
The F.B.I. has said that it is investigating at least 45 cases involving the backdating of options. Options practices at more than 80 companies nationwide are under investigation by the Securities and Exchange Commission or by federal prosecutors in San Francisco, Brooklyn and Manhattan.
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