Start Comverse technology backdating

Comverse technology backdating

These are the identified priority crime problem areas of the Financial Crimes Section (FCS) of the FBI.

The following notable statistical accomplishments are reflective in FY 2006 for Corporate Fraud: $1.2 billion in Restitutions, $41.5 million in Recoveries, $14.2 million in Fines, and $62.6 million in Seizures. (Comverse) is a New York-based designer and manufacturer of telecommunication systems and software, with reported revenues of $1.2 billion in FY 2005.

The chart below is reflective of the number of pending cases from FY 2002 through FY 2006. In August 2006, former Comverse Chief Executive Officer Kobi Alexander, former Chief Financial Officer David Kreinberg, and former General Counsel William Sorin were charged with various types of fraud related to illegal compensation of Comverse executives.

During FY 2006, the FBI investigated 490 Corporate Fraud cases resulting in 171 indictments and 124 convictions of corporate criminals.

Areas investigated under Health Care Fraud include: billing for services not rendered, billing for a higher reimbursable service than performed (upcoding), performing unnecessary services, kickbacks, unbundling of tests and services to generate higher fees, durable medical equipment fraud, pharmaceutical drug diversion, outpatient surgery fraud, and Internet pharmacy sales.

The majority of Corporate Fraud cases pursued by the FBI involve accounting schemes designed to deceive investors, auditors and analysts about the true financial condition of a corporation.

Through the manipulation of financial data, the share price of a corporation remains artificially inflated based on fictitious performance indicators provided to the investing public. While the number of cases involving the falsification of financial information remains relatively stable, the FBI has recently observed a spike in the number of Corporate Fraud cases that involve the backdating of executive stock options.

Currently, the FBI is investigating 59 cases involving the manipulation of executive stock options and anticipates that the number of cases will continue to grow.