©Reuters. British entrepreneur Mike Lynch arrives at Westminster Magistrates Court on February 12, 2021 in London, England.Reuters/Toby Melville/File Photo
Written by Greg Bensinger and Jody Godoy
(Reuters) – Mike Lynch, the wealthy tech founder once hailed as Britain's answer to Steve Jobs, is on trial over charges he defrauded Hewlett-Packard in the $11 billion sale of software company Autonomy. He will face a U.S. jury in California on Monday. .
Federal prosecutors in San Francisco have accused Autonomy co-founder Lynch and former finance chief Stephen Chamberlain of inflating the company's profits starting in 2009. Prosecutors allege the scheme led to HP's (NYSE:) disastrous acquisition of the company in 2011.
Autonomy's collapse ranked among the worst corporate transactions, leading to the firing of HP's chief executive and an $8.8 billion writedown.
The implosion began a legal battle that lasted more than a decade for Lynch.
HP essentially won a civil suit against him and Autonomy's former chief financial officer Sushobhan Hussain in London in 2022, seeking $4 billion in damages.
Mr. Hussein was separately convicted on U.S. charges in 2018. Months later, prosecutors indicted Lynch and Chamberlain.
Lynch fought extradition but was ultimately brought to the United States 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, granted Lynch bail on a $100 million bond but allowed him to be held at his home in San Francisco under 24-hour security. .
Lynch's lawyer said in court that his net worth is approximately $450 million.
Prosecutors have accused Mr. Lynch and Mr. Chamberlain of inflating Autonomy's finances through past contracts and “round trip” transactions that provided cash to customers through sham contracts. Part of the goal was to attract buyers like HP, prosecutors said.
In the trial, scheduled to end in late May, jurors could hear from dozens of witnesses, including former HP chief executive Leo Apotheker, who was fired weeks after the Autonomy deal was announced. There is.
Lynch's lawyer told the court that he was considering testifying in his own defense in his trial, where he faces 16 counts of fraud and conspiracy. Chamberlain faces a 15 count.
Both men are presumed innocent. The 12 jurors must reach a unanimous verdict to convict anyone.
Hussain was convicted of 16 charges in a jury trial against Breyer in 2018 and was released in January after serving a five-year sentence.
In a civil case, a British judge ruled in January 2022 that Lynch masterminded an elaborate fraud to inflate the value of autonomy, a move the Silicon Valley company effectively won in a civil case. It means what you did.
Lynch said HP didn't know what it was doing with Autonomy and didn't have a deep understanding of HP's technology.
