Former Autonomy boss Lynch to fight U.S. fraud charges


The US Department of Justice (DoJ) has filed fraud charges against Mike Lynch, founder of Autonomy, which HP acquired in 2011 for $11bn.

Lynch faces up to 20 years in prison if he is successfully convicted on the 14 charges of conspiracy and fraud in a case filed by prosecutors in a federal court on Thursday.

They and former Autonomy chief financial officer Sushovan Hussain are accused of using "false and misleading financial statements" between 2009 and 2011 to make Autonomy more attractive to a potential purchaser.

Tech giant HP Inc has reported strong Q4 revenues of $15.4bn, yielding it a tidy $1.5bn in net income.

The statement also claims Lynch is being made a scapegoat for HP's failures, framing the allegations as a business dispute over the application of United Kingdom accounting standards. "He also intimidated, pressured and paid off persons who raised complaints about or openly criticized Autonomy's financial practices and performance".

"These stale allegations are meritless and we reject them emphatically", Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson said in a statement.

According to the BBC, Lynch is being charged with artificially inflating Autonomy's revenues by overstating them.

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The indictment accuses Lynch and Chamberlain, both said to be United Kingdom residents, of engaging in a "scheme to defraud" buyers of Autonomy stock between January 2009 and October 2011.

Meanwhile the UK's own Serious Fraud Office dropped an investigation into the Autonomy sale in 2015 - finding "insufficient evidence for a realistic prospect of conviction".

They said the USA allegations are stale and meritless and reject them emphatically.

Lynch has always denied any wrongdoing and his lawyers say the indictment was a "travesty of justice" and that he would contest the charges. One of its early products was a virtual dog, based on Mr Lynch's own otterhound, Gromit.

The statement added Dr Lynch "has done nothing wrong and will vigorously defend the charges against him".

Lynch, who co-founded Autonomy in 1996 and was once dubbed Britain's answer to Bill Gates for turning the firm into a world leader, sold it to HP for $11billion (£7.1billion) in 2011.