February 9: Lawyers acting for Mike Lynch, the British tech multimillionaire facing extradition on fraud charges, accused the US in a London court on Monday of exerting itself as “an overweening international police force”.
Lynch, charged with 14 counts of conspiracy and fraud linked to the $11.6bn (£8.6bn) sale of his former company Autonomy to Hewlett-Packard (HP) a decade ago, was beginning a legal fight against extradition to the US at Westminster magistrates court.
Lawyers for Lynch told the court the executive, who denies the charges, should face trial in the UK, the Guardian reported.
Alex Bailin QC, representing Lynch, said the US Department of Justice is “not the global marshal of the corporate world” and that as the alleged crimes took place in the UK he should face the allegations here. “We say this case belongs here in Britain. It concerns events, the overwhelming majority of which occurred in the United Kingdom,” Bailin told the court.
The US is seeking to extradite Lynch to stand trial in the US because it alleges that he fraudulently inflated the value of Autonomy before its sale to HP in 2011.
HP wrote down the value of Autonomy by $8.8bn just one year after the sale, after allegedly discovering $5bn of “accounting improprieties, disclosure failures and outright misrepresentations”. HP is also suing Lynch for $5bn in a civil case in which judgment is expected in the the next few months.
Bailin said: “A decision in this court [against extradition] would not be an automatic ‘get out of jail free’ card. The SFO [Serious Fraud Office] might decide to prosecute him. And, of course, he would vigorously contest that trial on British soil.”
Bailin alleged that the US planned to call upon Sushovan Hussain, Autonomy’s former chief financial officer, to give evidence against his former boss. Hussain, also a British citizen, was in 2019 convicted in the US on 16 counts of fraud and sentenced to five years in jail and handed a $4m fine.
“There was a desire to convict Mr Hussain first and try to get him to cooperate and get him to testify against Mr Lynch,” Bailin said “‘Flipping the witness’ as it’s called in the vernacular, I believe.”
A lawyer for the US government told the court Lynch was “the leader of a corporate conspiracy” based on “cooked books”.
Marks Summers QC said: “This case is straightforward … This was an English company, cooking its books in England, making it appear what it wasn’t, and then persuading an American company to grossly overpay for it, based on those cooked books.
“The only unusual feature of this case was the titanic scale of the money involved.”
He suggested that even “the most basic school child maths” suggested HP had been tricked into paying at least $1.7bn too much. Lynch personally made about $800m from the sale of Autonomy, which he founded in Cambridge in 1996, and had retained a large stake.
The case is being closely followed politically, as several ministers have raised concerns about Lynch’s extradition and also long-running suggestions that the UK-US extradition treaty is lopsided in favour of the US.
Boris Johnson called the treaty “imbalanced” when speaking about the US decision to refuse an extradition request for Anne Sacoolas, the suspect charged with causing the death by reckless driving of Harry Dunn.
Five former British cabinet ministers last month signed a letter to the Times arguing that Lynch must not be extradited. “The government cannot stand by as another Briton risks being delivered like this to the US justice system,” the letter said.
In 2013, judges were granted new powers known as the “forum bar”, which can be used to block extraditions if a large part of the alleged criminal activity took place in the UK.
The judge, Michael Snow, said he would wait for the outcome of the civil trial before making a ruling on the extradition case. The hearing continues.