The billionaire founder of British software group Autonomy, Mike Lynch, was extradited to the US after losing a High Court appeal last month.
Lynch faces a criminal trial in California on 17 charges, including conspiracy to commit wire fraud and securities fraud, in connection with Hewlett Packard Enterprise’s $11 billion acquisition of Autonomy in 2011. Lynch has always denied any wrongdoing.
At the heart of the criminal case is an alleged manipulation of the software group’s accounts that led to the Silicon Valley company paying an additional $5 billion when it bought Autonomy in 2011. Sushovan Hussain, Autonomy’s former chief financial officer, was convicted in the US in 2018 and is currently serving five years in prison.
Lynch had been fighting his extradition to the United States through British courts for nearly four years, but lost his final appeal in April and arrived in California on a commercial flight escorted by U.S. marshals on Thursday.
At a hearing shortly after Lynch’s arrival in San Francisco, a California judge ordered Lynch to pay $100 million in bond and $50 million in cash or stock as security. Lynch has pleaded not guilty and will be remanded in custody pending bail conditions.
Judge Charles Breyer of the U.S. District Court for the Northern District of California, who also presided over the Hussein case, found Lynch to be a “serious and substantial” flight risk because he had no U.S. ties and he had “significant Influence”. If he absconds, an estimated $450 million in financial resources could easily sustain him for the rest of his life.”
The judge ordered that Lynch must live at the San Francisco address and be guarded by a private security company with the approval of a U.S. court at his own expense. Security measures must include video surveillance and armed guards. He must also surrender his travel documents.
Lynch and his attorneys are now expected to begin preparations for his trial in San Francisco.
The businessman’s extradition may raise concerns among some about the U.S. judicial system’s push to extradite corporate executives involved in white-collar crimes.
Conservative MP David Davies has been a strong critic of the UK-US extradition treaty, which he called a “parody of justice”, with lawmakers criticizing the 2003 bill as biased towards the US and used to target alleged white-collar suspects as well as terrorists molecular.
Lynch has argued that British courts should deny his extradition to the US because any criminal charges could be tried in the UK because Autonomy is a UK-listed company and the charges relate to UK accounting standards and accounting decisions. His lawyers argued that the Serious Fraud Office had investigated the case and could file a lawsuit.
Last year, Lynch also lost another civil high court case brought against him by Hewlett-Packard Enterprise over the Autonomy sale, which involved the same charges and heard some of the same witnesses who will testify in the US criminal trial.
On Friday, the UK Home Office confirmed Lynch’s extradition. “On 21 April, the High Court refused leave to appeal Dr Lynch’s extradition,” it said in a statement. “Therefore, the normal 28-day legal deadline for surrender to the United States applies. Dr. Lynch was extradited to the United States on May 11.”
A spokesman for Lynch at Invoke Capital, whose investment firm has backed tech startups including cybersecurity firm Darktrace, declined to comment. The extradition was first reported by Sky News.