(Bloomberg) British tech tycoon Mike Lynch takes the witness stand in what U.S. prosecutors call a “massive” Silicon Valley fraud that sold his software startup 13 years ago to Hewlett-Packard for $11 billion. He denied responsibility for selling the items for US dollars.
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Lynch already lost a civil trial in London in 2022 over the ill-fated acquisition of Autonomy, Britain’s second-largest technology company, in 2011. He is currently fighting criminal charges that he defrauded Hewlett-Packard into overpaying for billions of dollars.
Lynch began testifying Thursday in San Francisco federal court, telling jurors that over the past 10 weeks government witnesses he had never met had been involved in discussions and accounting matters in which he was not involved. He said he has seen him recall the decision many times.
“I’ve had a lot of reactions to what I’ve heard so far, but I guess I can sum it up in one word: surreal,” he said.
The once-prominent entrepreneur was asked by his lawyer whether Autonomy was “perfect.”
“Of course it wasn’t perfect,” he says. “The realities of life are nuanced and complex, and sometimes we do our best to overcome them. Businesses are just like that.”
Read more: British tech star Lynch takes risky move to testify in US fraud trial
Defendants of white-collar crimes rarely take the risk of testifying. This is because prosecutors have broad discretion to ask defendants questions about their actions, choices, conversations, and motives that led to the crime they are charged with. Lynch could face up to 25 years in prison if convicted of the most serious charges.
Prosecutors say Autonomy misrepresented its revenue growth by backdating contracts, pretending to ship goods and overpaying for unnecessary services to induce vendors to buy Autonomy’s products. He claims he used various accounting tricks to make himself look good.
Mr Lynch told the jury he had delegated tasks for which he was not an expert, joking: “I can write code, but I can’t sell toffee.” He claimed ignorance of some of the wrongdoing attributed to him and denied other allegations.
“If you take a microscope to a clean kitchen, you’ll find bacteria,” he says.
He distanced himself from Autonomy’s former finance chief, Sushobhan Hussain, who was convicted of fraud by a San Francisco jury in 2018 and sentenced to five years in prison.
Read more: Tech mogul Lynch called mastermind of ‘massive fraud’ by US
The jury was presented with the same evidence that helped Hewlett-Packard persuade a London judge two years ago to conclude that Mr. Lynch and Mr. Hussain had inflated Autonomy’s sales to induce a sale. Most of the testimony of witnesses has been presented. Hewlett-Packard is seeking $4 billion in damages from a British judge, but the judge has said it is likely to award a “significantly lower” amount.
Lynch also testified in the civil trial, saying former Hewlett-Packard CEO Meg Whitman failed to integrate the deal “beyond her ability.”
The San Francisco trial is now in its final stages, with both sides expected to finish presenting evidence next week, after which the case will move to closing arguments and for the jury to consider a verdict.
The case is United States v. Lynch, 18-cr-00577, United States District Court, Northern District of California (San Francisco).
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