Ex-Comverse Chief Captured After Manhunt
Wednesday September 27, 6:57 pm ET
By Tom Hays, Associated Press Writer
Indicted Ex-Comverse Chief Executive Captured in Southwest Africa After Two-Month Manhunt
NEW YORK (AP) -- After a two-month international manhunt, the indicted former chief executive of leading voicemail-software maker Comverse Technology Inc. was captured on Wednesday in southwest Africa, U.S. officials announced Wednesday.
Authorities in the Republic of Namibia, acting on information from the FBI, arrested Jacob "Kobi" Alexander in the country's capital of Windhoek, where he was living as a fugitive with his family. U.S. officials were expected to ask for his extradition at a hearing on Thursday so he could face charges in Brooklyn alleging he hatched a scheme to pocket millions of dollars by secretly manipulating stock options.
"We are very grateful for the Namibians' swift action and commend them for their vigilance," U.S. Attorney Roslynn Mauskopf said in a statement.
Calls to Alexander's attorney in New York were not returned.
The manhunt was launched in late July shortly before authorities unsealed a criminal complaint accusing Alexander and two other former top executives of fraud.
Before he disappeared, Alexander, 54, an Israeli citizen and a U.S. permanent resident, allegedly transferred $57 million to Israel, fueling speculation he may have fled there. News reports in Israel speculated that he may have been hiding out in a small Sri Lankan fishing village.
Two other defendants, former Finance Chief David Kreinberg and former senior general counsel William Sorin, surrendered in August and were released on $1 million bond each.
The complaint unsealed in federal court accuses the three men of making stock options more lucrative by backdating their exercise price to a low point in the stock's value. Usually, a stock option's exercise price coincides with the market value at the time of a grant to give the recipient an incentive to drive the price higher.
<b?>From 1991 through 2005, Alexander exercised options and sold stocks worth approximately $150 million, making a $138 million profit, according to the complaint. Of that, about $6.4 million was generated by backdating options, it said.
Prosecutors allege Kreinberg and Sorin earned about $1 million each on backdated options.
In addition, the company awarded thousands of stock options to fictional employees, then secretly transferred the awards to an internal account under the name I.M. Fanton, which stood for phantom, court papers said. The scheme allowed Alexander to award those options to real "favored employees" and to himself without board of directors approval, the papers added.
Comverse Technology is headquartered in Woodbury, N.Y, giving Brooklyn prosecutors jurisdiction over the case.
A U.S. State Department spokeswoman, Nancy Beck, said that though the United States does not have an extradition treaty with Namibia, laws there still would allow a judge to release him to U.S. custody.
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