Jacob "Kobi" Alexander, a fugitive technology executive who has spent a decade hiding in Africa from criminal charges in a stock-options backdating scandal, is returning to the U.S. to plead guilty in Brooklyn federal court.

Mr. Alexander was chief executive of Comverse Technology Inc., a New York company that made voice mail systems. As with that of many tech and telecom companies, Comverse's stock rocketed upward in volatile trading during the 1990s and early 2000s.

Prosecutors allege Mr. Alexander, along with Comverse's general counsel and its finance chief, for years would look for low-price trading days in the past on which to pretend they and other employees had been awarded stock options at that day's price. Since an option grants its holder the right to buy shares at a fixed price, the alleged manipulation scored them instant gains. The backdating added millions to Mr. Alexander's compensation.

Mr. Alexander is scheduled to appear in court on Wednesday and plead guilty to one count of securities fraud "relating solely to backdating," according to Benjamin Brafman, one of his lawyers. His lawyers have asked for him to be released on a $25 million bond, cosigned by his wife and his sister.

A spokeswoman for the Brooklyn U.S. attorney's office declined to comment. In a letter to the judge overseeing the case unsealed on Tuesday, the prosecutor said the parties have agreed to resolve the case and that Mr. Alexander would plead guilty to the one count. The letter said the Justice Department would oppose bail.

A Wall Street Journal article on stock-option backdating in March 2006, based on statistical analysis of option-grant patterns at several companies, characterized Mr. Alexander's grants as wildly improbable. The sharp share-price gains shortly after his purported grant dates couldn't realistically be explained by chance.

Mr. Alexander and two other top executives, David Kreinberg and William Sorin, resigned several weeks later. Over that summer, the Federal Bureau of Investigation sought their arrest. Messrs. Kreinberg and Sorin turned themselves in. Mr. Alexander was nowhere to be found.

He had traveled to Israel, his lawyer at the time had said, and then made his way with his family to Windhoek, the hilly capital of Namibia, a western African nation that has a cinematic red-sand coastal desert and no formal extradition treaty with the U.S.

Back in Brooklyn, a grand jury handed down a 35-count indictment charging him with, among other things, securities fraud, wire fraud and money laundering—for spiriting $57 million out of the U.S. while under investigation that summer.

The indictment also alleged that around a week after the Journal's call inquiring about the grants, Mr. Alexander attempted to bribe another person, later revealed to be Mr. Kreinberg, to take the fall. He offered $2 million, prosecutors said, and then went up to $5 million.

U.S. officials tried to get Mr. Alexander back from Namibia. They persuaded Namibia's president to issue a proclamation declaring the U.S. a place to which the country's courts could extradite. Mr. Alexander spent a few days in a Namibian jail, then was released on bail.

He settled down in Namibia, investing in local businesses, including an auto-body shop called Monarch Panelbeaters, and finding local business partners, including a former Namibian military officer. Mr. Alexander and his wife bought a house near a golf course, funded a scholarship for Namibian students, donated to Windhoek's only synagogue and invested in a low-income housing project.

Meanwhile, the extradition stalled for 10 years in Namibian courts. In their letter on Monday, Mr. Alexander's lawyers Mr. Brafman and Jeremy Temkin wrote: "It is safe to say that there was no end in sight to the Namibian judicial proceedings."

The industrywide backdating scandal a decade ago took its toll on American corporations. Scores of executives and directors, many of them in the tech industry, lost their jobs, and several were criminally prosecuted.

One executive, William McGuire, the CEO of insurer UnitedHealth Group Inc., resigned and agreed to forfeit $620 million in options gains and retirement pay to settle civil claims and a complaint by the Securities and Exchange Commission. He neither admitted nor denied the SEC's charges.

If Mr. Alexander is convicted, the maximum sentence would be 25 years in prison, but Mr. Alexander's lawyers said in their letter that sentences in similar backdating cases have been far shorter.

According to the lawyers, of the 29 executives charged with backdating since 2006, 16 have pleaded guilty and received an average sentence of less than 2.5 months in prison. The longest sentence of that group was 15 months, Mr. Alexander's lawyers said.

Mr. Kreinberg, his erstwhile CFO, pleaded guilty and served one day in custody after pleading guilty. Mr. Sorin, the general counsel, also pleaded guilty and was sentenced to one year and one day.

While in Namibia, Mr. Alexander kept talking with American authorities. In 2010, he settled civil actions with federal prosecutors and the SEC, agreeing to pay $53 million. He sold three apartments at the Park Imperial, at West 56th Street and Broadway, for $35.2 million to help pay the tab.

Write to Charles Forelle at charles.forelle@wsj.com and Christopher M. Matthews at christopher.matthews@wsj.com

 

(END) Dow Jones Newswires

August 23, 2016 14:15 ET (18:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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