Kobi Alexander goes to prison in US

BRILLIANT, accomplished and respected, but also incredibly foolish.

This was how a New York judge described Israeli businessman Jacob ‘Kobi’ Alexander, who in August last year gave up his prolonged fight against extradition from Namibia to the US, before sentencing him to a two-and-a-half-year prison term on Thursday.

“I really don’t understand how someone as brilliant, accomplished and focused and respected as you could be so incredibly and abjectly foolish to make some of the decisions you made,” judge Nicholas Garaufis told Alexander before sentencing him in the US district court for the eastern district of New York, business news service Bloomberg reports.

Judge Garaufis sentenced Alexander (64), who was a fugitive from the American justice system while living in Namibia for 10 years, to 30 months’ imprisonment on a charge of securities fraud. Alexander pleaded guilty to the charge on 24 August last year, after he had agreed to return to New York from Namibia, where for a decade he had been resisting an attempt to be extradited to the US.

New York-based defence lawyer Benjamin Brafman, who represented Alexander, informed The Namibian on Friday that Alexander would not be appealing against the sentence.

Brafman said Alexander would get credited for the time he has already been in jail in the US and also in Namibia. Alexander was refused bail after pleading guilty to a charge of fraud six months ago, and also spent six days in jail in Namibia, where he was arrested in September 2006 on a request from the US government, before being granted bail in a Namibian record amount of N$10 million.

Brafman added that Alexander would also get a reduction on his sentence for good behaviour, with the result that he would effectively have to serve about two years’ imprisonment.

He is likely to serve his sentence in a low-security correctional facility, and may also be able to serve part of the jail term in Israel, Brafman said.

With his guilty plea, Alexander admitted that he fraudulently backdated stock options in the New York-based technology company Comverse, which he helped found in 1982 and ran until early 2006. By changing the dates on which he was given the option to buy shares in the company at some point in the future, Alexander ensured that he would be able to buy shares at lower prices, and thus would realise a bigger profit from the purchase.

According to the US district attorney’s office for the eastern district of New York, which issued a statement on Alexander’s sentencing on Thursday, Alexander gained about US$30 million in paper profits from the fraudulent stock options scheme in which he, another senior Comverse executive, and a lawyer of the company were involved.

The financial price that Alexander has had to pay for the crime was much higher than the profit he stood to make, it is indicated in the statement released by the district attorney’s office.

Alexander ultimately agreed to pay US$60 million to Comverse to settle litigation pursued by shareholders of the company, waived claims of more than US$72 million that he had against Comverse, and also settled related lawsuits with the US government, resulting in a US$6 million penalty by the US Securities and Exchange Commission (SEC), while he was in Namibia, Reuters also reported after his sentencing.

Having previously lived in New York City, Alexander, his wife and their three children relocated to Namibia near the end of July 2006 – shortly before a grand jury in New York decided to charge him with 32 counts, which included multiple counts of fraud and money laundering. The number of charges later increased to 35, but Alexander eventually agreed to plead guilty to one charge in an indictment that replaced the charges initially brought against him.

In a letter to the court before his sentencing, Alexander apologised for fleeing to Namibia, Reuters reported. He wrote: “I know I should have come back sooner, but I could not bring myself to face the consequences of my actions.”

Bloomberg also reported that Alexander expressed regret to the judge before his sentencing, and apologised for his decision to leave the US instead of dealing with the charges that were being drawn up against him in 2006.

“I have always been an honourable man, but in these matters I acted without honour,” Bloomberg quoted Alexander as having said.

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