Ex-Comverse CEO pleads guilty to fraud, a decade after fleeing to Africa
By Nate Raymond
NEW YORK (Reuters) - The former chief executive officer of Comverse Technology Inc pleaded guilty to securities fraud on Wednesday and was ordered detained a decade after fleeing the United States for Namibia to avoid prosecution.
Jacob "Kobi" Alexander, the Woodbury, New York-based software developer's founder, entered the plea in federal court in Brooklyn, after ending his fight to avoid extradition.
Following his plea, the 64-year-old Israeli citizen's lawyers sought his release on a $25 million bond pending his Dec. 16 sentencing. But U.S. District Judge Nicholas Garaufis ordered Alexander detained, calling him a flight risk.
"His intelligence and his guile are a clear indication that he can't be trusted," Garaufis said.
Benjamin Brafman, Alexander's lawyer, said he was "bitterly disappointed." It was unclear if Alexander would appeal.
The case was one of the last open U.S. prosecutions arising from government or internal investigations of stock options backdating at over 200 companies, including Comverse, which was acquired in 2013 by former unit Verint Systems Inc (VRNT.O: Quote).
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 admitted he and other executives from 1998 to 2001 used "hindsight" to select the effective dates for granting options for employees, resulting in misleading statements to investors. Continued...