Britain’s Steve Jobs praised by tech giants as mastermind of $11 billion ‘fraud’: Prosecutor

Photo of author

By journalsofus.com


Wealthy tech founder Mike Lynch, once considered Britain’s answer to Steve Jobs, testifies at his US trial to defend himself against charges of defrauding Hewlett-Packard in the $11 billion sale of his software company Autonomy. Will give, his lawyer said in court on Monday. ,

Federal prosecutors in San Francisco have accused Autonomy co-founder Lynch and former finance executive Stephen Chamberlain of orchestrating a scheme to inflate the company’s revenues starting in 2009 and ending with the company’s disastrous acquisition by HP in 2011.

Prosecutor Adam Reeves said in federal court in San Francisco that Lynch “concocted a fantastic story” citing the British tech company’s revenues and “pure software” business model.

Reeves said, “HP ate it up – they thought this kind of software company was exactly what they needed.”

Autonomy co-founder Mike Lynch is charged with creating a plan to increase the company’s revenue. reuters

Reeves said, meanwhile, Autonomy was secretly profiting from hardware resale and using improper accounting to meet analyst expectations at Lynch’s direction.

After the deal, HP reduced the value of the British company by $8.8 billion a year, saying it exposed serious accounting irregularities.

Lynch’s attorney Reed Weingarten urged the jury to be skeptical, saying that HP was “happy to pay” billions of dollars for Autonomy’s software and rushed the due diligence process to screen out potential competitors.

Weingarten said the Cambridge-educated Lynch was focused on technology and trusted Autonomy’s finances to Sushovan Hussain, Autonomy’s then-chief financial officer.

“Mike spent many sleepless nights worrying about autonomy, but not about accounting,” Weingarten said.

Prosecutors accused Lynch and Chamberlain of boosting Autonomy’s finances through backdated agreements and “roundtrip” deals that provided cash to customers through sham contracts. Prosecutors said one purpose was to lure buyers like HP.

In the trial, which begins in late May, jurors are expected to hear from dozens of witnesses, including former HP Chief Executive Officer Leo Apotheker, who was fired just weeks after the Autonomy deal was announced.

Lynch faces 16 charges of fraud and conspiracy. Chamberlain faces 15 charges.

Both men are presumed innocent. The 12-person jury would have to reach a unanimous verdict to convict one of them.

Former HP CEO Leo Apotheker was fired a few weeks after the Autonomy deal was announced. reuters

The explosion of autonomy led to more than a decade of legal battles for Lynch.

HP narrowly won a civil suit against him and Hussain in London in 2022, and is seeking $4 billion in damages.

Lynch said HP didn’t know what it was doing with Autonomy, and didn’t understand its technology deeply.

Hussain was convicted separately on US charges in 2018. Months later, prosecutors brought charges against Lynch and Chamberlain.

After the deal, HP reduced the value of the British company by $8.8 billion a year, saying it exposed serious accounting irregularities. bloomberg

Lynch fought his extradition, but was ultimately brought to the US to face charges after Britain’s High Court refused permission to appeal last year.

U.S. District Judge Charles Breyer, who is overseeing the trial, set Lynch’s bail at $100 million, but confined him to a home in San Francisco under 24-hour security.

Lynch’s lawyer has said in the court that his net worth is around $450 million.

Hussain was convicted on 16 counts in a jury trial before Breyer in 2018. He was released from prison in January after serving five years of his sentence.

Leave a comment