Friday, October 13, 2006

Namibian Prosecutor Appeals Grant of Bail to Kobi Alexander, Who Faces New Charges in the U.S.

Former Comverse Technology CEO Kobi Alexander's days of freedom could come to an end in the near future.  After fleeing -- or deciding to resettle -- in Namibia in July, shortly before federal prosecutors filed charges against him for securities fraud related to options back-dating at Comverse, he was arrested by Namibian authorities at the request of the U.S.  A magistrate in Windhoek, the capitol, released Alexander after he posted $1.3 million bail and surrendered his Israeli passport.  Now, Prosecutor General Olivia Imalwa has appealed that decision to the High Court, arguing that Alexander is a flight risk and could sneak out of Namibia even without the surrendered passport.  Alexander has been accused by federal prosecutors of transferring over $50 million shortly before he was charged, and could have considerably more in assets available.

The U.S. is still preparing its extradition request to have Alexander returned under a law adopted by the Namibia Parliament at the request of the Justice Ministry; the two countries do not have an extradition treaty.  According to an article (here) in Ha'aretz, an Israeli newspaper, the extradition request is due this week.  If the court determines that Alexander can be extradited to the United States, he will be held in jail  while he appeals that decision to the High Court, a process that can take years rather than months.

Meanwhile, on the U.S. side of the case, a grand jury in the Eastern District of New York returned a superseding indictment that adds obstruction of justice, bribery, and a new securities fraud charge to the thirty-two counts in the earlier indictment (see Bloomberg story here).  The obstruction and bribery counts involve an alleged offer by Alexander in March 2006 to a Comverse executive to "name your price" to take the blame for the options back-dating at the company.  It is not clear yet who the executive is, but the roster of those cooperating with the government may rise.  Federal prosecutors disclosed that they are negotiating possible plea bargains with the two other former Comverse officers charged along with Alexander, CFO David Kreinberg and general counsel William Sorin.  The defendants originally were charged in a criminal complaint, and the government requested that the court grant a thirty-day extension before a grand jury has to return an indictment because the parties were engaged in plea discussions.  If either agrees to cooperate, it is very likely they will provide additional information about Alexander's involvement in the options back-dating, probably strengthening the government's case.  An AP story (here) discusses the status of the case against Kreinberg and Sorin. (ph)

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