As a tech mogul nicknamed “Britain’s Bill Gates,” Mike Lynch often said the secret to his success was his refusal to let convention rule him.
The Cambridge-educated computer expert has made it clear that he did not become one of the UK’s richest people by slavishly following the advice of business textbooks.
And after breaking the first rule of white-collar fraud trials by taking the stand in his own defense, it seems his unconventional approach has paid off once again.
In a spectacular reversal for US federal prosecutors, who rarely lose a case, Lynch was acquitted of criminal charges by a jury in San Francisco.
Thursday’s decision to acquit Lynch, 58, of 15 charges — 14 of fraud and one of conspiracy — ends a 13-year legal saga over allegations he cooked the books at his software company Autonomy before US computer giant Hewlett-Packard ( HP ) bought it for a staggering $8.6 billion pounds in 2011.
Although Autonomy’s finance chief Sushovan Hussain was found guilty of similar charges and served five years in prison, its bluffing CEO rejected advice to seek a plea deal and fought a long battle to resist extradition to the US.
He faced up to 25 years in prison if convicted under America’s fiercely repressive justice system.
Lynch denied all the allegations and insisted he was being made a scapegoat for HP’s managerial incompetence by failing to do proper due diligence before buying the company.
Former Autonomy CFO Stephen Chamberlain, who was tried alongside Lynch on the same charges, was also acquitted on all counts.
Prosecutors portrayed Lynch as a ruthless and intimidating con man who ran Autonomy like a mob boss. Citing accounting irregularities, they said he was the “driving force” behind Silicon Valley’s biggest fraud to date by boosting the company’s revenue in the two years before the HP deal by creating “a fabulous company success story.”
Within a year of the sale, HP wrote down the value of Autonomy by a whopping £6.9 billion, revealing serious accounting flaws.
Lynch admitted that his company was “not perfect”, but insisted that his focus was on new ideas and products rather than sales and accounting.
He said he was “delighted” by the verdict, adding: “I’m looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.”
The judges could be forgiven for thinking that Lynch was most looking forward to getting back to his rare breed pigs, given how much he had to say about them.
The reason defense attorneys usually advise their clients not to testify in such cases is that it exposes them to potentially disastrous cross-examination.
But during four days in the witness box toward the end of his 12-week trial, Lynch spoke at length about his passion for preserving rare breeds of pigs and cows as he sought to soften his image with jurors.
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But when he began to explain how “medieval breeds of pigs are really robust,” Justice Charles Breyer cut him off, saying the court had heard “enough farm stories.” His acquittal will spare him a job in the US prison system that would be anything but comfortable.
While American white-collar criminals are usually sent to “minimum security” facilities, where prison conditions are mild and violence is rare, foreigners must go to tougher “low security” prisons.
Lynch would most likely be sent to the grim Allenwood Federal Correctional Institution in Pennsylvania.
Former prisoner Giles Darby, one of the so-called ‘NatWest Three’ – a trio of British bankers jailed for fraud in 2008 following the Enron scandal – has written a book describing the daily grind of being locked up in cramped and barely furnished cells, the threat of routine violence and horrific gang beatings.
He was also ’emotionally tortured’ by not being able to see his five young daughters. “I felt like I had arrived in hell,” he said.
Instead, Lynch will return to an infinitely more comfortable life in the UK, where he and his wife, Angela Bacares, have two daughters and several homes, including a £20m Chelsea home and a Suffolk farm.
Before his trial began, Lynch spent a year in San Francisco living under court-ordered house arrest in a rented property. He was under 24-hour camera surveillance and wore a GPS tracking bracelet around his ankle.
At least he’s still not out financially. HP won a civil case against him in the High Court in 2022. Although damages have not yet been decided, the company is seeking more than £3 billion.
Lynch was estimated to be worth £1bn, but his lawyers said the real figure was closer to £350m.
His legal team said after the verdict that the US government had demonstrated “profound overreaching” in its “relentless 13-year effort to pin HP’s well-documented incompetence” on Lynch. A spokesman for the U.S. attorney’s office in San Francisco said they “recognize and respect the ruling.”
His acquittal adds a new chapter to the spectacular rise and fall – and rise again – of a man who was celebrated by the British establishment after becoming a rare great British success in the tech world.
Born in Ilford, east London, and raised in Chelmsford by working-class Irish parents, Lynch founded his first company in the late 1980s from a student flat in Cambridge. He co-founded Autonomy in 1996 and it soon became the world leader in Silicon Fen, the nickname for the cluster of technology companies around Cambridge.
Lynch earned a reputation as an outspoken eccentric. A hardcore James Bond fan, he drove an Aston Martin DB5 and named his office meeting rooms after 007 villains such as Goldfinger and Dr No. He even kept piranhas in aquariums in the atrium of Autonomy headquarters.
In 2006 he was made an OBE and appointed to the Board of Directors of the BBC. He also became Warden of the Royal Botanic Gardens at Kew, Fellow of the Royal Society and Deputy Lieutenant of Suffolk. In 2011, he was appointed to the then Prime Minister David Cameron’s Science and Technology Council.
Critics of the UK’s uneven extradition deal with the US say Lynch should never have been sent there when Washington refused to extradite American Anne Sacoolas, who pleaded guilty to driving on the wrong side of the road when she ran over and killed 19 people. -year-old Harry Dunn out of RAF Croughton, Northamptonshire, in 2019.
Thursday’s verdict will no doubt reignite the debate over whether people like Lynch should ever be brought before the American justice system.