British tech tycoon Mike Lynch is set to testify in his own criminal fraud trial in a San Francisco court on Thursday.
According to The Guardian, the trial, which began in March, centers on Lynch's company's acquisition deal with Hewlett-Packard in 2011. He allegedly duped Hewlett Packard into buying his software startup for more than $11 billion 13 years ago.
British Tech Tycoon Mike Lynch Faces Fraud Trial in US
US authorities have charged Mike Lynch with 16 counts of wire fraud, securities fraud, and conspiracy relating to the acquisition deal. If deemed guilty, the tech tycoon could face up to 25 years in prison. Lynch has pleaded not guilty to all charges.
Lynch's defense team hinted they would move for a mistrial at the end of Wednesday's court proceedings due to the prosecution's alleged improper questioning during cross-examination. They said they would decide by Thursday morning whether to file a motion, which, if granted, could lead to Lynch being retried at a later date.
Lynch, once dubbed "Britain's Bill Gates," sold his software company Autonomy to Hewlett-Packard for $11.1 billion. Prosecutors alleged that Lynch built the deal on "a series of lies," including artificially inflating the firm's sales, misleading auditors, analysts, and regulators, and making individuals who raised concerns feel intimidated.
Lynch received £500 million from the £8.72 billion ($11.1 billion) deal. However, after a year, Hewlett-Packard changed the value of the acquisition by $8.8 billion after reporting "serious" accounting improprieties, outright misrepresentations, and disclosure failures.
Defense of Mike Lynch
In his defense, the legal team of Mike Lynch attributed some of the financial discrepancies to differences between US and UK accounting standards. They also argued that the tech tycoon was not the only person behind the decisions in question.
Lynch's attorney, Reid Weingarten, has characterized the case as an ordinary business dispute that escalated into an "overblown fraud case." On the other hand, prosecutors described Lynch as a domineering boss who was responsible for the "massive" yearslong fraud.
Assistant US attorney Adam Reeves accused Autonomy of providing false and misleading financial statements showing fake inflated revenue between 2009 and 2011 to indicate growth and repeatedly lying to auditors and investors "over 10 quarters."
In 2019, Lynch was formally charged by a federal grand jury and extradited from the UK to the US in May. After posting a bond of $100 million, he was placed under house arrest in a San Francisco property, where he has been staying the past year in line with the trial.
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