Mike Lynch, the rich tech founder as soon as hailed as Britain’s resolution to Steve Jobs, will testify at his US trial to protect himself in opposition to fees he defrauded Hewlett-Packard within the $11 billion sale of his device corporate Autonomy, his legal professional stated in court docket on Monday.
Federal prosecutors in San Francisco have accused Autonomy co-founder Lynch and previous finance govt Stephen Chamberlain of scheming to inflate the corporate’s earnings beginning in 2009 and finishing with HP’s disastrous acquisition of the corporate in 2011.
Lynch “spun a marvelous story,” touting the British tech corporate’s earnings and “natural device” trade fashion, prosecutor Adam Reeves stated in federal court docket in San Francisco.
“HP ate it up – they concept this type of device corporate is strictly what they wanted,” Reeves stated.
Autonomy co-founder Mike Lynch is accused of scheming to inflate the corporate’s earnings. REUTERS
In the meantime, Autonomy was once secretly making the most of {hardware} resales and the use of fallacious accounting to fulfill analyst expectancies at Lynch’s path, Reeves stated.
After the deal, HP wrote down the price of the British corporate through $8.8 billion a 12 months, pronouncing it had exposed critical accounting improprieties.
Lynch’s legal professional Reid Weingarten advised jury to be skeptical, pronouncing that HP was once “glad to pay” billions of bucks for Autonomy’s device and rushed the due-dilligence procedure to close out possible competition.
The Cambridge-educated Lynch was once excited about era, and relied on Autonomy’s budget to Sushovan Hussain, Autonomy’s then-chief monetary officer, Weingarten stated.
“Mike had many sleepless nights being worried about Autonomy, however no longer about accounting,” Weingarten stated.
Prosecutors accuse Lynch and Chamberlain of padding Autonomy’s budget thru backdated agreements and “roundtrip” offers that fronted money to consumers thru faux contracts. A part of the aim was once to lure consumers like HP, prosecutors stated.
On the trial scheduled to run into overdue Would possibly, jurors might pay attention from dozens of witnesses, together with Leo Apotheker, the previous HP leader govt who was once fired weeks after the Autonomy deal was once introduced.
Lynch faces 16 counts of fraud and conspiracy. Chamberlain faces 15 counts.
Each males are presumed blameless. The 12-person jury will have to achieve a unanimous verdict to seek out both of them accountable.
Former HP CEO Leo Apotheker was once fired weeks after the Autonomy deal was once introduced. REUTERS
Autonomy’s implosion introduced greater than a decade of criminal battles for Lynch.
HP considerably received a civil lawsuit in opposition to him and Hussain in London in 2022, and it is looking for $4 billion in damages.
Lynch had stated HP didn’t know what it was once doing with Autonomy, and was once out of its intensity in figuring out his era.
Hussain was once one after the other convicted on US fees in 2018. Months later, prosecutors introduced fees in opposition to Lynch and Chamberlain.
After the deal, HP wrote down the price of the British corporate through $8.8 billion a 12 months, pronouncing it had exposed critical accounting improprieties. Bloomberg
Lynch fought his extradition, however was once in the end delivered to the USA to stand the costs after Britain’s Top Court docket refused him permission to attraction remaining 12 months.
US District Pass judgement on Charles Breyer, who’s overseeing the trial, granted Lynch bail secured through a $100 million bond, however limited him to a house in San Francisco below 24 hour guard.
Lynch’s legal professional has stated in court docket that his web price is round $450 million.
Hussain was once convicted on 16 counts at a jury trial earlier than Breyer in 2018. He was once launched from jail in January after serving a five-year sentence.
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