/ 28 September 2006

Fugitive CEO captured in Namibia

United States officials are expected to seek the extradition of the indicted former chief executive of voicemail-software maker Comverse Technology during a hearing on Thursday in Namibia, the south-west African country where he was captured following a two-month international manhunt.

Jacob ”Kobi” Alexander was arrested on Wednesday in the country’s capital of Windhoek, where he was living as a fugitive with his family, officials said. Namibian authorities took him into custody after acting on information from the FBI. Alexander faces 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,” US Attorney Roslynn Mauskopf said in a statement on Wednesday.

Calls to Alexander’s attorney in New York were not returned on Wednesday. A US State Department spokesperson, 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 into US custody.

Authorities began hunting for Alexander in late July shortly before a criminal complaint was unsealed accusing him and two other former top executives of fraud.

Before he disappeared, Alexander (54) an Israeli citizen and a US 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


From 1991 until 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 IM Fanton, which stood for phantom, court papers said. The scheme allowed Alexander to award those options to real ”favoured employees” and to himself without board of directors approval, the papers added.

Comverse Technology is headquartered in Woodbury, New York, giving Brooklyn prosecutors jurisdiction over the case. ‒ Sapa-AP