Charges against US fugitive amount to N$1 billion

THE grim confines of the Windhoek Central Prison are this weekend set to remain the place of residence of Jacob ‘Kobi’ Alexander, the fugitive former Chief Executive Officer of American software company Comverse Technology Inc, who was arrested in Windhoek on Wednesday.

Alexander has been on the FBI’s ‘Most Wanted’ list since July 31. The 54-year-old American, who was arrested at the request of the United States government, made a 10-minute appearance before Magistrate Uaatjo Uanivi in the Windhoek Magistrate’s Court in Katutura yesterday afternoon.His appearance took place a little over 24 hours after he was detained pending the start of extradition proceedings aimed at returning him to the US to stand trial on 32 charges, including fraud and money laundering charges involving as much as US$138 million (about N$1,05 billion).With no Magistrate available – or willing to be available – for court proceedings involving Alexander, lawyers representing the Israeli-born millionaire businessman were kept waiting for about six hours before Alexander could appear before a Magistrate.By the time that they eventually managed to get a court and presiding officer available for his appearance, plans to ask the court to release Alexander on bail had to be shelved again.A bail application is now scheduled to be launched on Monday, Deputy Prosecutor General Johnny Truter informed Magistrate Uanivi.One of Alexander’s lawyers, Herman Oosthuizen, confirmed the arrangement.Alexander himself did not speak during the proceedings.Oosthuizen also asked the Magistrate to direct that Alexander should be kept in custody at Windhoek Central Prison over the weekend.He had also spent the first night of his detention at the prison, rather than in the even grimmer and grimier environs of the overcrowded holding cells available at Police stations in Windhoek.THE ARREST Alexander’s arrest on Wednesday took place at an apartment at the Windhoek Country Club where he, his wife and their children had set up home, it was established yesterday from a source who witnessed the arrest.Alexander had been in Namibia since July, The Namibian was also informed.He might have regarded the country as a safe haven, since Namibia did not have any formal extradition arrangements with the US in place.This situation changed earlier on Wednesday, though, with the publication of a Government Gazette containing a proclamation announcing that President Hifikepunye Pohamba had on August 31 specified the United States as a country to which people may be extradited from Namibia under the 1996 Extradition Act.The ink on the proclamation was barely dry before a provisional warrant for Alexander’s detention, which had been requested by the US, was signed by a Windhoek Magistrate, and the arrest was carried out.In terms of the Extradition Act, the US would now, within 30 days after he had been detained, have to prepare and submit a formal request for Alexander’s extradition.MANHUNT The Federal Bureau of Investigation in the US launched an international manhunt for Alexander in late July, reportedly after he had failed to appear in a US court to answer allegations of fraud.According to a notice issued by the FBI as part of its search for Alexander, he was charged on July 31 in the Eastern District Court of New York with various counts of fraud.The indictment that was filed against him in that court states that Alexander resigned as both Chief Executive Officer and Board Chairman of Comverse Technology Inc (CTI) on May 1 this year, in the midst of an internal investigation by a special committee of the company’s board of directors.In the 43-page indictment it is charged: “The defendant Alexander, together with others, engaged in a scheme to backdate millions of stock options granted to himself and CTI employees to days when the stock of CTI was trading at periodic low points.The defendant reaped substantial personal gain from this fraudulent conduct.”It is explained in the indictment that an option is the right to buy company shares at a set price on a future date.That price is ordinarily the price of the stock on the date that the option was granted.The holder of the option makes a profit by exercising the option to buy the stock on the future date at the previously set price, and selling the shares when it is trading at a higher price.Alexander is accused of having backdated options to dates when share prices were lower than the real dates on which he was granted the options.The end result, it is claimed, was that when he then cashed in those options, he reaped even larger profits than he would otherwise have done.Alexander allegedly committed the crimes that he is accused of between January 1998 and March 2006.Over the years that he is alleged to have exercised stock options in CTI, he made a total profit of some US$138 million (N$1,05 billion), it is alleged in the indictment.Of that amount, about US$6,4 million (N$49,9 million) was generated by backdating options, it is alleged.In the indictment it is also claimed that during July this year, when he knew that he was under investigation in connection with the alleged options backdating scheme, Alexander transferred more than US$57 million (about N$437 million) from one of his American bank accounts to two accounts in Israel.He has been charged with money laundering as a result of that transaction.The 54-year-old American, who was arrested at the request of the United States government, made a 10-minute appearance before Magistrate Uaatjo Uanivi in the Windhoek Magistrate’s Court in Katutura yesterday afternoon.His appearance took place a little over 24 hours after he was detained pending the start of extradition proceedings aimed at returning him to the US to stand trial on 32 charges, including fraud and money laundering charges involving as much as US$138 million (about N$1,05 billion).With no Magistrate available – or willing to be available – for court proceedings involving Alexander, lawyers representing the Israeli-born millionaire businessman were kept waiting for about six hours before Alexander could appear before a Magistrate.By the time that they eventually managed to get a court and presiding officer available for his appearance, plans to ask the court to release Alexander on bail had to be shelved again.A bail application is now scheduled to be launched on Monday, Deputy Prosecutor General Johnny Truter informed Magistrate Uanivi.One of Alexander’s lawyers, Herman Oosthuizen, confirmed the arrangement.Alexander himself did not speak during the proceedings.Oosthuizen also asked the Magistrate to direct that Alexander should be kept in custody at Windhoek Central Prison over the weekend.He had also spent the first night of his detention at the prison, rather than in the even grimmer and grimier environs of the overcrowded holding cells available at Police stations in Windhoek.THE ARREST Alexander’s arrest on Wednesday took place at an apartment at the Windhoek Country Club where he, his wife and their children had set up home, it was established yesterday from a source who witnessed the arrest.Alexander had been in Namibia since July, The Namibian was also informed.He might have regarded the country as a safe haven, since Namibia did not have any formal extradition arrangements with the US in place.This situation changed earlier on Wednesday, though, with the publication of a Government Gazette containing a proclamation announcing that President Hifikepunye Pohamba had on August 31 specified the United States as a country to which people may be extradited from Namibia under the 1996 Extradition Act.The ink on the proclamation was barely dry before a provisional warrant for Alexander’s detention, which had been requested by the US, was signed by a Windhoek Magistrate, and the arrest was carried out.In terms of the Extradition Act, the US would now, within 30 days after he had been detained, have to prepare and submit a formal request for Alexander’s extradition.MANHUNT The Federal Bureau of Investigation in the US launched an international manhunt for Alexander in late July, reportedly after he
had failed to appear in a US court to answer allegations of fraud.According to a notice issued by the FBI as part of its search for Alexander, he was charged on July 31 in the Eastern District Court of New York with various counts of fraud.The indictment that was filed against him in that court states that Alexander resigned as both Chief Executive Officer and Board Chairman of Comverse Technology Inc (CTI) on May 1 this year, in the midst of an internal investigation by a special committee of the company’s board of directors.In the 43-page indictment it is charged: “The defendant Alexander, together with others, engaged in a scheme to backdate millions of stock options granted to himself and CTI employees to days when the stock of CTI was trading at periodic low points.The defendant reaped substantial personal gain from this fraudulent conduct.”It is explained in the indictment that an option is the right to buy company shares at a set price on a future date.That price is ordinarily the price of the stock on the date that the option was granted.The holder of the option makes a profit by exercising the option to buy the stock on the future date at the previously set price, and selling the shares when it is trading at a higher price.Alexander is accused of having backdated options to dates when share prices were lower than the real dates on which he was granted the options.The end result, it is claimed, was that when he then cashed in those options, he reaped even larger profits than he would otherwise have done.Alexander allegedly committed the crimes that he is accused of between January 1998 and March 2006.Over the years that he is alleged to have exercised stock options in CTI, he made a total profit of some US$138 million (N$1,05 billion), it is alleged in the indictment.Of that amount, about US$6,4 million (N$49,9 million) was generated by backdating options, it is alleged.In the indictment it is also claimed that during July this year, when he knew that he was under investigation in connection with the alleged options backdating scheme, Alexander transferred more than US$57 million (about N$437 million) from one of his American bank accounts to two accounts in Israel.He has been charged with money laundering as a result of that transaction.