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regular-article-logo Sunday, 16 June 2024

UK tech entrepreneur Lynch extradited to the US on fraud charges

Appearing in court on Thursday, Lynch was ordered by a judge to pay a $100 million bond, hand over his passport and to be placed under 24 hour guard to secure his release

Reuters Published 12.05.23, 06:23 PM
British entrepreneur Mike Lynch

British entrepreneur Mike Lynch Twitter

Mike Lynch, co-founder of UK software firm Autonomy, has been extradited to the United States to face criminal charges in a near decade-long legal battle and fall from grace for a man once hailed as Britain's answer to Bill Gates.

Lynch faces 17 charges over Hewlett Packard's (HP) $11 billion acquisition of Autonomy, the company he grew into Britain's leading tech company, before it spectacularly unravelled after being bought by HP in 2011.

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Britain's interior ministry said on Friday that Lynch was extradited on May 11.

He arrived in San Francisco on a commercial flight accompanied by U.S. Marshals, court documents show.

Appearing in court on Thursday, Lynch was ordered by a judge to pay a $100 million bond, hand over his passport and to be placed under 24 hour guard to secure his release.

Lynch, 57, who has always denied any wrongdoing, could face 20 years in prison.

Once lauded by academics, scientists and politicians for setting up a software giant from his ground-breaking research at Cambridge University, he has spent the last decade fighting lawsuits related to the HP takeover.

The deal quickly soured. Within a year, HP wrote down the value of Autonomy by $8.8 billion and later brought a civil lawsuit in London against Lynch and Autonomy’s former chief financial officer Sushovan Hussain.

In the 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.

Meanwhile, the U.S. had brought criminal charges against Lynch for wire fraud and securities fraud.

He fought extradition proceedings but on April 21, Britain's High Court refused him permission to appeal. His lawyers had argued that he should be prosecuted in Britain.

"The United States’ legal overreach into the UK is a threat to the rights of all British citizens and the sovereignty of the UK," Lynch said in April when his appeal was rejected.

His spokesperson declined to comment on Friday.

Lynch pleaded not guilty to 17 counts in court in the U.S. on Thursday, court documents show, and a status conference will be held on May 19 to set a date for the trial. His wealth was estimated at $450 million by the U.S. courts.

In 2019, Lynch's former colleague, Hussain, was convicted of fraud in the United States and sentenced to five years in prison.

Lynch's high profile legal battles have also raised questions for Darktrace, a FTSE 250 British cyber security company. Lynch was central to its creation and he and his wife Angela Bacares own about 10% of the 2 billion pound company, according to Refinitiv data.

Darktrace said in February Lynch played no part in running it and was not on its board.

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