SAN FRANCISCO, June 3 (Reuters) -
A U.S. prosecutor told jurors on Monday there was no
reasonable doubt that British tech pioneer Mike Lynch directed
fraud at software company Autonomy before he sold it for $11
billion to Hewlett-Packard ( HPE ), as Lynch's criminal trial neared its
end.
The 2011 deal was one of the biggest British tech deals at
the time, but quickly went sour. HP wrote down Autonomy's value
by $8.8 billion within a year of the acquisition.
Assistant U.S. Attorney Robert Leach told jurors on Monday
they should have no reasonable doubt there was fraud at
Autonomy, and that Lynch directed it.
Lynch and former Autonomy finance executive Stephen
Chamberlain face charges of fraud and conspiracy for allegedly
scheming to inflate the company's revenue starting in 2009,
partly to entice a buyer.
Lynch's defense team scored a win last week when U.S.
District Judge Charles Breyer threw out one count of securities
fraud as not supported by the evidence. Lynch still faces one
count of conspiracy and 14 counts of wire fraud.
The Cambridge University-educated entrepreneur took the
stand in his own defense at the trial, denying wrongdoing and
telling jurors that HP botched the two companies' integration.
Prosecutors say the pair padded Autonomy's finances in
several ways, including back-dated agreements and "round-trip"
deals that fronted cash to customers through fake contracts.
At the trial, which began in mid-March, jurors have heard
from more than 30 government witnesses including Leo Apotheker,
the former HP CEO who was fired weeks after the Autonomy deal
was announced.
Lynch's legal team has argued that HP was so eager to
acquire Autonomy ahead of potential competitors that it rushed
through due diligence before the sale.
On the stand, Lynch said he had been focused on tech issues,
and entrusted money matters and the accounting decisions at
issue to Sushovan Hussain, Autonomy's then-chief financial
officer.
Hussain was separately convicted in 2018 at a trial in the
same court on charges of conspiracy, wire fraud and securities
fraud related to the deal with HP. He was released from U.S.
prison in January after serving a five-year sentence.
Lynch was one of the UK's leading tech entrepreneurs,
drawing comparisons to Apple ( AAPL ) cofounder Steve Jobs and
Microsoft ( MSFT ) cofounder Bill Gates.
The Autonomy acquisition was meant to fuel HP's software
business. Instead, it spawned a series of bitter and expensive
legal battles.
HP largely won a civil lawsuit against Lynch and Hussain in
London in 2022, though damages have not yet been decided. The
company is seeking $4 billion.