Tech Tycoon Warns of U.S. Overreach in Extradition Fight
(Bloomberg) -- British software tycoon Mike Lynch launched an attack on the reach of U.S. prosecutors around the world as he kicked off his fight to prevent extradition to America on fraud charges.
The Department of Justice is “not the global marshal of the corporate world,” his lawyer, Alex Bailin, told a London court Tuesday. British executives should face allegations of misconduct at home, Bailin said, noting that the U.K. Serious Fraud Office has signaled it could reopen its own investigation into alleged fraud at Lynch’s one-time software company, Autonomy.
The U.S. “is not an overweening international police force,” Bailin said.
Both Hewlett Packard Enterprise Co. and the DOJ have pursued Lynch and his deputy over allegations that Lynch dressed Autonomy up for a sale to HP by inflating sales. The Silicon Valley hardware giant acquired Autonomy for $11 billion in 2011 only to write down the value by $8.8 billion a year later.
Lynch, who personally made more than $800 million from the HP deal, was “the leader of a corporate conspiracy,” the U.S. said.
The alleged fraud “inflicted lasting reputational injury on HP,” said Mark Summers, a lawyer representing the U.S. “The Autonomy fraud has cast a long shadow” on HP.
The high-profile case has attracted significant political attention with lawmakers highlighting perceived imbalances in the U.S.-U.K. extradition treaty. Lynch argues that a “very substantial measure” of the supposed wrongdoing took place in Britain.
The SFO dropped its previous investigation in 2015, saying there was “insufficient evidence” for a conviction. The agency, which recognized the “significant and serious harm” of the potential misconduct, told the court it was “reserving its right” to reopen the case if the extradition was refused, Bailin said. Still, it insisted that the U.S. was better placed to pursue the prosecution.
A spokesman for the SFO didn’t immediately return messages seeking comment.
Lynch, 55, is also waiting for the verdict in a $5 billion London civil trial brought by HP. Judge Michael Snow has agreed to wait for the outcome of that trial before making his own decision in the extradition case, Bailin said.
Lynch said that HP spent tens of millions of dollars attempting to prove fraud, but failed to tie him to any wrongdoing. His attorney argued that HP brought the case “out of buyer’s remorse.”
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