(Adds details from court proceedings)
By Nate Raymond
NEW YORK Feb 23 The former chief executive
officer of Comverse Technology Inc, who returned to the United
States last year after spending a decade in Namibia to avoid
prosecution, was sentenced to 2-1/2 years in prison on Thursday
for engaging in securities fraud.
Jacob "Kobi" Alexander, the Woodbury, New York-based
software developer's founder, was sentenced by U.S. District
Judge Nicholas Garaufis in Brooklyn, who criticized the former
executive for trying to avoid justice for so long.
"I really don't understand how someone as brilliant and
accomplished and focused and respected as you could be so
incredibly, abjectly foolish to make some of the decisions you
made," Garaufis said.
The sentence was above the up to two years in prison his
lawyers sought, but below the 10-year maximum he faced.
Alexander, dressed in brown jail clothing, said he was "truly
sorry for everything I have done wrong."
"I deeply regret running away instead of dealing with the
justice system like I should have," he added.
The 64-year-old Israeli citizen has been in custody since he
pleaded guilty to securities fraud in August, after Garaufis
rejected his request for release on a $25 million bond. He is
expected to receive credit for his time in jail.
The case was one of the last open U.S. prosecutions arising
from government or internal investigations of backdating of
stock options at over 200 companies, including Comverse, which
was acquired in 2013 by former unit Verint Systems Inc.
In backdating, a company retroactively grants stock options
on dates when stock prices were lower, making them more
valuable. Concealing the practice through improper accounting is
illegal, and can inflate earnings.
Prosecutors said that from 1998 to 2001 Alexander
participated in a scheme to use hindsight to select the
effective dates for granting options for employees, resulting in
misleading statements to investors.
Alexander fled to Namibia with his family in July 2006 amid
the investigation. Charges were announced that August against
him, William Sorin, Comverse's general counsel, and David
Kreinberg, its finance chief.
Sorin pleaded guilty and was sentenced to one year in
prison. Kreinberg was spared prison after pleading guilty.
While abroad, Alexander agreed in 2009 to pay $60 million to
Comverse in connection with shareholder litigation, and to waive
over $72 million in claims he had against Comverse.
He settled related civil government lawsuits in 2010,
resulting in a $6 million penalty by the U.S. Securities and
The case is U.S. v. Alexander, U.S. District Court, Eastern
District of New York, No. 06-cr-00628.
(Reporting by Nate Raymond in New York; Editing by Dan Grebler
and Jonathan Oatis)