Extradited British tech founder Mike Lynch starts U.S. fraud trial
(Reuters) - Mike Lynch, the wealthy tech founder once hailed as Britain's answer to Steve Jobs, will face a U.S. jury in California on Monday at a trial over the accusation he defrauded Hewlett-Packard in the $11 billion sale of his software company Autonomy.

Federal prosecutors in San Francisco accuse Autonomy co-founder Lynch and former finance executive Stephen Chamberlain of inflating the company's revenue starting in 2009 -- a scheme prosecutors say resulted in HP's disastrous acquisition of the company in 2011.

Autonomy's unraveling ranks among the worst corporate deals, leading to the firing of HP's chief executive officer and an $8.8 billion writedown.

The implosion launched more than a decade of legal battles for Lynch.

HP substantially won a civil lawsuit against him and Sushovan Hussain, Autonomy's former chief financial officer, in London in 2022, and it is seeking $4 billion in damages.

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

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

U.S. District Judge Charles Breyer, who is overseeing the trial, granted Lynch bail secured by a $100 million bond, but restricted him to a home in San Francisco under 24 hour guard.

Lynch's attorney has said in court that his net worth is around $450 million.

Prosecutors accuse Lynch and Chamberlain of padding Autonomy's finances through backdated agreements and "roundtrip" deals that fronted cash to customers through fake contracts. Part of the purpose was to entice buyers like HP, prosecutors said.

At the trial scheduled to run into late May, jurors may hear from dozens of witnesses, including Leo Apotheker, the former HP chief executive who was fired weeks after the Autonomy deal was announced.

Lynch's attorneys have said in court that he is considering testifying in his own defense at the trial, where he faces 16 counts of fraud and conspiracy. Chamberlain faces 15 counts.

Both men are presumed innocent. The 12-person jury must reach a unanimous verdict to find either of them guilty.

Hussain was convicted on 16 counts at a jury trial before Breyer in 2018. He was released from prison in January after serving a five-year sentence.

In the civil lawsuit, a British judge ruled in January 2022 that Lynch had masterminded an elaborate fraud to inflate the value of Autonomy, meaning the Silicon Valley company substantially succeeded in its civil case.

Lynch had said HP did not know what it was doing with Autonomy, and was out of its depth in understanding his technology.

(Reporting by Jody Godoy in New York, Greg Bensinger in San Francisco and Paul Sandle in London; Editing by David Gregorio)
Technology
(Reuters) -     Mike Lynch, the wealthy tech founder once hailed as Britain's answer to Steve Jobs, will face a U.S. jury in California on Monday at a trial over the accusation he defrauded Hewlett-Packard in the $11 billion sale of his software company Autonomy.