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Ex-Comverse CEO returning to U.S. to plead guilty in fraud case

Fugitive U.S. millionaire Jacob "Kobi" Alexander sits with his wife Hanna, as he awaits the start of his extradition hearing in Windhoek, September 17, 2008. REUTERS/Stringer

By Nate Raymond and Jonathan Stempel NEW YORK (Reuters) - Ending a decade on the run, the former chief executive officer of Comverse Technology Inc who fled to Africa to avoid prosecution in a stock options scandal is returning to the United States to plead guilty in a fraud case. Jacob "Kobi" Alexander, 64, will enter a guilty plea in federal court in Brooklyn on Wednesday to one count of backdating stock options, his lawyer, Benjamin Brafman, said in an email on Monday. Alexander has been in Namibia following his arrest there in September 2006 after a global manhunt. The Israeli-born Alexander was freed on bail the following month. He had been fighting extradition to the United States, where he was indicted on 35 counts, including securities fraud, money laundering and obstruction. U.S. prosecutors have long called the Israeli-born Alexander a fugitive. Comverse, a Woodbury, New York, software developer, was bought out in 2013 by its former unit, Verint Systems Inc. Alexander is expected to plead guilty before U.S. District Judge Nicholas Garaufis. The U.S. Department of Justice had no comment on the plea, which was reported earlier by CNBC. Alexander's case is one of the last remaining major criminal cases stemming from the dot-com bubble, and from federal probes into stock options backdating at more than 200 companies. In backdating, a company retroactively grants stock options on dates when stock prices are lower, making them more valuable. Concealing the practice through improper accounting is illegal, and can inflate earnings. Alexander was one of three Comverse executives charged with what prosecutors called a brazen scheme to reap millions of dollars in profits through backdating between 1998 and 2001. He was also accused of parking backdated options intended for favored employees in a secret account, known as "Phantom." While in Namibia, Alexander has resolved various U.S. civil lawsuits related to Comverse. In December 2009, he agreed to pay $60 million to Comverse and waive more than $72 million in severance and other compensation claims in a settlement with shareholders. The following November, he agreed to pay $53.6 million to settle claims by the U.S. Securities and Exchange Commission. Alexander's lawyers said their client plans to continue charitable work in Namibia, including operating soup kitchens that, according to local reports, serve hundreds of children each day. (Additional reporting by T.J. Strydom in Johannesburg; Editing by Lisa Von Ahn and Jeffrey Benkoe)