How lacking billionaire Mike Lynch was victorious in fraud trial

Just a couple of months ago, British billionaire tech tycoon Mike Lynch left a US courtroom bleary eyed and a free man having been acquitted in one of the biggest ever fraud cases.

In the weeks before, Lynch had said his goodbyes to his family and believed he would die in prison with a 25 year jail term all but inevitable with fewer than 0.5 per cent of federal criminal cases in America ending in acquittal.

But the 59-year-old tycoon – who had spent much of the previous year living under house arrest with an electronic tag attached to his ankle – beat the odds, much to his own surprise. 

Mr Lynch, dubbed ‘Britain’s Bill Gates’, placed his head in his hands and was embraced by his wife when he was cleared of conducting a massive fraud relating to a £8.64 billion sale of his firm, Autonomy, to US company Hewlett-Packard in 2011. 

The three month trial on the 17th floor of San Francisco’s federal courthouse brought an end to a 13-year legal saga that had been hanging over the entrepreneur’s head. 

It was an unexpected ‘second life’ he was going to grab with both hands. He invited guests from legal firm Clifford Chance to a ‘freedom party’ on his £30 million superyacht Bayesian to celebrate his victory.  

That ‘second life’ appears to have ended in tragedy, with Mr Lynch, alongside his 18 year old daughter Hannah, among six missing and feared dead after the 180ft yacht sunk near Palermo after being hit by a freak waterspout caused by bad weather.

And in a double tragedy, his former colleague and Autonomy finance executive Stephen Chamberlain, who was tried alongside Mr Lynch on the same charges and also acquitted on all counts, days earlier died after being hit by a car.

Mr Lynch – who also owns a home in Chelsea – had spoken of his ‘indescribable’ relief at being acquitted and joy at returning to Britain. He texted one friend saying it was ‘so wonderful to be home’.

He has also spoken of his delight at being able to spend time with his two daughters, 21 and 18, and their six dogs.

To mark his freedom, Mr Lynch had invited guests from legal firm Clifford Chance as well as his own company Invoke Capital to celebrate on the yacht trip.

The father of Ayla Ronald, who was part of Mr Lynch’s legal team, confirmed that the sailing trip was supposed to be a celebration of the tycoon’s acquittal.

Another guest told doctors at the hospital that it was part of a ‘corporate holiday’.

Speaking in his first newspaper interview following his acquittal, Mr Lynch told The Times: ‘I’d had to say goodbye to everything and everyone, because I didn’t know if I’d ever be coming back.’

Mr Lynch responded to his acquittal by revealing he had feared dying in prison if found guilty – saying that medical issues meant he felt it would have been ‘difficult to survive’ time behind bars.

He added: ‘If this had gone the wrong way, it would have been the end of my life as I have known it in any sense.

‘It’s bizarre, but now you have a second life – the question is, what do you want to do with it?’

Prosecutors tried to depict Mr Lynch as a domineering and controlling CEO, but the Cambridge-educated computer expert’s calm, controlled and sometimes witty performance on the stand had won over jurors. 

He even joked he ‘missed the tea’ when he spoke of feeling ‘trapped’ in San Francisco for months due to a volcano eruption in Iceland in 2010, reported the Financial Times. 

During four days in the witness box towards the end of his 12-week trial, Mr Lynch talked at length about his passion for conserving rare breeds of pigs and cows as he sought to soften his image with jurors. 

It was an unconventional approach for Mr Lynch to take the stand, but it was a gamble that paid off as, one by one, ‘not guilty’ rang out in the courtroom for all of the 15 charges — 14 of wire fraud and one of conspiracy. 

Even though Autonomy’s finance chief, Sushovan Hussain, was found guilty on similar charges and served five years in prison, its chief executive rejected advice to seek a plea bargain and fought a long battle to resist extradition to the US.

Hussain signed a settlement agreement was released from jail in January after serving his sentence. 

Mr Lynch had denied all the charges, insisting he was being made a scapegoat for HP’s managerial incompetence in not doing its due diligence properly before buying the company. 

He had spent a year before the trial in San Francisco under house arrest, with a tag strapped to his ankle, and under 24 hour security guard supervision he had to pay for himself.   

Prosecutors had portrayed Lynch as a ruthless and intimidating fraudster who ran Autonomy like a Mafia boss. 

Citing accounting irregularities, they said he’d been the ‘driving force’ of Silicon Valley’s biggest ever fraud by inflating the company’s revenues in the two years leading up to the HP deal by spinning a ‘fabulous tale of corporate success’.

Within a year of the sale, HP wrote down Autonomy’s value by an astonishing £6.9billion, saying it had uncovered serious accounting improprieties.

Lynch admitted his company was ‘not perfect’ but insisted that he had concentrated on new ideas and products rather than sales and accounting.

Pronouncing himself ‘elated’ by the verdict, he added: ‘I am looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.’ 

Stephanie Siegmann, a partner at Hinckley Allen and former prosecutor and national security chief in the US attorney’s office in Massachusetts, told the FT: ‘It appears the government believed that because Mike Lynch was the CEO that he knew everything that was going on at the company.

‘The evidence appears clearly not to have met the [evidentiary] burden.’