Kobi Alexander - Criminal Charges

Criminal Charges

On July 31, 2006, Alexander, who holds Israeli citizenship, was charged by United States Department of Justice authorities with multiple charges of conspiracy to commit various types of fraud (including securities fraud, wire fraud and mail fraud), as well as with related offences, all relating to the timing of Comverse's stock option grants.

After Alexander left the United States on June 21, 2006 on a pre-planned annual vacation in Israel, his lawyers arranged with American authorities that he would return to face indictment on July 30, 2006; however, he instead traveled to Germany. On July 31 he was added to the FBI's Most Wanted List.

On August 9, 2006 the United States Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the Eastern District of New York against Alexander, along with alleged co-conspirators William F. Sorin, Comverse’s former Senior General Counsel, and David Kreinberg, Comverse’s former Chief Financial Officer. The complaint makes nine claims of violation of the Securities Act and the Exchange Act, including fraud (First and Second Claims), and falsification of books, records or accounts (Fourth Claim). Through this action, the Commission is seeking permanent injunctive relief, disgorgement of ill-gotten gains, civil damages, and a prohibition against any of the defendants becoming officers of a securities-issuing entity under SEC jurisdiction.

Alexander transferred over 40 million dollars from his personal U.S. bank account to his personal bank account in Israel. He was arrested by Interpol in Windhoek, Namibia on September 27, 2006. He was released on bail on October 3, 2006. According to a Reuters report of April 23, 2007, the Namibian government described Alexander as “very passionate" about the country and its people; Alexander has promised to boost academic interest in science and technology in Namibia by establishing an annual scholarship for primary and secondary level students. He has also begun to introduce advanced technology to the country with his development of a low budget solar powered housing project for 100 low-income Namibian families.

Despite fighting extradition to the United States, Alexander announced on January 28, 2008 that he has filed suit against Comverse. Alexander claims the firm owes him $72 million in severance, unexercised stock options, and bonus pay.

On July 3, 2008 a Namibian court split decisions for and against Alexander granting his request to remove the judge currently assigned to preside at his extradition hearing while declining to assign a magistrate of his choosing. Additionally, the Namibian High Court did not, at Alexander’s attorneys’ request, rule unconstitutional the Extradition Act which would allow Alexander to be imprisoned at some point during the upcoming extradition hearing. As reported by Bloomberg.com on November 19, 2008 a hearing to request Alexander’s extradition to the United States was postponed until March 4, 2009 pending Alexander’s appeal to Namibia’s Supreme Court regarding which judge should hear the case. This appeal, not yet scheduled, will likely be adjudicated in March or April 2009. The final outcome of the extradition proceedings can be several years away pending the appeals process. Despite impending extradition proceedings, Alexander has invested heavily within the country.

In 2011, Kobi Alexander settled the civil charges with the SEC and gave up bank accounts worth $46 million to federal authorities.