Fugitive CEO Will Pay $50M Fine; Still On The Run

By Jonathan Dienst
|  Tuesday, Nov 23, 2010  |  Updated 3:09 PM EDT
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Fugitive CEO Will Pay $50M Fine; Still On The Run

AFP/Getty Images

Windhoek, NAMIBIA: US businesman Jacob "Kobi" Alexander (R) and his wife Hana (L) wait, 25 April 2007, at Windhoek magistrate's court during the postponing of the extradition cause against him. A Namibian court on Tuesday postponed a hearing which was supposed to start to extradite businessman Jacob "Kobi" Alexander, accused in the United States of financial transgressions and who found refuge in Namibia.

The fugitive CEO of Comverse Technologies has agreed to pay a $50 million dollar fine but still refuses to return to the U.S. to stand trial for his alleged crimes.

Federal prosecutors in Brooklyn said Jacob "Kobi" Alexander has agreed to pay $53.6 million dollars to settle charges he orchestrated a massive backdating stock scheme at his company.

Prosecutors had sought to put Alexander on trial for his alleged scheme which they said began in 1991 and continued through 2005.  Instead, the FBI said Alexander fled with his family to Namibia where he continues to live a life of luxury.  

Once in Namibia, Alexander reportedly threw a lavish Bar Mitzvah for one of his children - including paying for 200 guests to fly in from the U.S. and Israel to take part in the four day celebration.

Prosecutors had charged Alexander with conspiracy and securities fraud counts.  The firm's former chief financial officer as well as the general counsel have both pleaded guilty.  Comverse executives had set up bogus accounts and slush funds in order to loot millions from the firm.

In this financial deal - where Alexander does not admit to any wrongdoing - the federal arrest warrants and criminal charges remain in place.

"This case underscores the important role asset forfeiture plays in recovering stolen money from criminals and returning it to victims of crimes," said US Attorney Loretta Lynch.  "Alexander fled half way around the world, but was not able to escape the financial consequences of his crimes."

Millions frozen in accounts will now be returned to Comverse to be paid out to victims, prosecutors said.  An attorney for Alexander, Jeremy Temkin with Morvillo Abramowitz, did not return a call for comment.

The Securities and Exchange Commission said it is imposing a $6 million dollar fine as part of the settlement.

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