Is Britain’s Bill Gates about to spend 25 years in a U.S. prison cell?
He’s an Essex fireman’s son who made a billion. But today Mike Lynch faces fraud charges in a California court — defended by a lawyer who represented Jeffrey Epstein and Roman Polanski
The first computing breakthrough made by Mike Lynch was a program that allowed law enforcement to instantly match suspects’ fingerprints to records on their database.
Back in the early 1990s, it would have been hard to believe that the tech genius hailed as Britain’s answer to Bill Gates, who would later become an adviser to David Cameron’s government and also sit on the board of the BBC, would one day have his own fingerprints taken.
But, in a titanic fall from grace that has seen the 58-year-old tycoon spend much of the past year living under house arrest with an electronic tag attached to his ankle, Lynch will today enter a San Francisco courtroom to defend himself against fraud and conspiracy charges that could see him imprisoned for decades.
Fighting his corner will be a legal team led by Reid Weingarten, one of the American legal system’s most successful white-collar defenders, whose client list has included such notorious characters as the film director Roman Polanski, who fled the U.S. in the late 1970s after admitting statutory rape of a minor, and the late serial paedophile and friend of Prince Andrew, Jeffrey epstein.
A past master at representing the rich and famous, Weingarten has said he sometimes feels he is in the French Revolution, ‘defending the nobility against the howling mob’.
A string of heavily-hyped Silicon Valley entrepreneurs – from elizabeth holmes of the blood-testing Theranos venture to cryptocurrency ‘guru’ Sam Bankman-Fried – have in recent years been exposed as shameless frauds.
Infected by the tech industry mantra to ‘Fake it till you make it’, they have ended up in prison after being caught out wildly exaggerating their business achievements.
MIKE LYNCH OBE was similarly lauded as having the Midas touch, and the bluff essex boy, a 007 obsessive who looks rather like a Bond villain himself, became a leading light in a Uk tech industry that has thrown up few genuinely global figures.
he now faces up to 25 years in a U.S. prison if found guilty of 17 counts of conspiracy, and securities and wire fraud.
The charges relate to the business deal that was hailed at the time as his crowning glory – the £8.6 billion sale of his software and data company Autonomy to U.S. computer giant hewlett-Packard (HP) in 2011.
Lynch, who personally made more than £500million from the deal, became one of Britain’s richest people and everyone wanted to hear his advice on how to get ahead in business.
But the glitter rapidly faded when HP wrote down three-quarters of the value of Autonomy only a year after buying it, sacking Lynch and accusing him and other executives of having grossly inflated its size and profits during the sale. Lynch, along with former Autonomy vice president of finance, Stephen Chamberlain, deny the charges, but will face an uphill task in proving their innocence in the face of formidable U.S. federal prosecutors, who rarely lose such cases.
It doesn’t help that Lynch has already lost a 2019 civil fraud case based on similar allegations that HP – now hewlett Packard enterprises (HPE) – brought in the Uk. The high Court ruled in 2020 that HPE had ‘substantially won’ its case.
his separate three-year battle to avoid being extradited to face criminal charges culminated in Lynch going to the high Court to argue that American prosecutors were guilty of legal overreach which threatened Uk sovereignty and its citizens.
his plea was rejected and, last May, he was flown to California, accompanied by the U.S. Marshals Service, still loudly protesting his innocence.
The trial that starts today will be held in front of a jury in a city just 30 miles from HPE’s headquarters in Silicon Valley.
At least the trial will get him out of the house. After prosecutors convinced a judge that Lynch was a serious flight risk, he was forced to post $100million (£78 million) bail, surrender his passport and agree to house arrest. Consequently, for the past 11 months, Lynch has been largely restricted to a £27,000-per-month rented house in the smart Pacific heights neighbourhood, with video cameras scanning every room 24hours a day, and that GPS tracking bracelet on his ankle.
The judge overseeing his trial slightly relaxed his confinement conditions recently, allowing him outdoors between the hours of 9am and 9pm, but only if he is escorted by two armed private security guards — a service which he has had to pay for himself.
Described by the security company monitoring him as a ‘model supervisee’, Lynch reportedly spends his days talking to his investment firm, Invoke Capital, checking on the research he is funding in Cambridge on artificial intelligence and getting updates on his rare breed Red Poll cattle on his farm in Suffolk.
HPE revealed last month that it is seeking more than £3 billion in damages from Lynch, who is estimated to be worth £1 billion, although his lawyers put the figure at no more than £350 million.
however, hanging on to his liberty rather than his wealth is going to be the priority in the coming weeks for a man whom prosecutors are reportedly planning – with the help of testimony from ex-employees – to portray as an overbearing and ruthless tycoon who behaved in business like an iron-fisted Mob boss.
And Lynch, a Cambridgeeducated computer expert who loved to pepper his public pronouncements with criminal patter — ‘In tech, you need to bring a gun to a knife fight’, was one of his bullish lines — is certainly nothing if not unconventional.
HIS fixation with James Bond ran to naming conference rooms at the companies he ran after Bond villains such as Dr no and Goldfinger.
Autonomy even had that classic Bond baddie accessory that appeared in you Only Live Twice — a piranha tank — in its atrium.
he continued the jokey connection with crime in his corporate videos. In a five-minute one for Autonomy sales staff that was made in 2005, Lynch pretends to be a Mob boss known as ‘ Big Mike’ taking a conference call with his under-bosses, all of them wearing Mafia-style fedoras.
As Big Mike sits at his desk sharpening his knife, one of his minions complains that he couldn’t fit a rival’s ‘ wife in the trunk of the car’ because ‘ the broad’s legs was too long’.
Another makes a joke about having to tie someone up with string ‘but he just kept breaking out’, while a third gets so angry about workers’ failure to ‘collect’ that he smashes a phone with a baseball bat.
Some might dismiss the video as harmless fun, but U.S. prosecutors claim it was actually highly revealing. They plan to introduce the video at Lynch’s trial as evidence of his actual thuggish management style.
They intend to call witnesses who will say he frequently compared Autonomy to the Mafia and made himself out to be someone ‘to whom the rules do not apply’. he allegedly told one employee: ‘you can never leave, we are like the Mafia, we are like family.’
Prosecutors accuse Lynch of not only ‘ artificially inflating’ Autonomy’s balance sheets and falsifying its accounts, but also of intimidating or sacking analysts who challenged them.
According to prosecutors, Lynch once told his head of investor relations he could have a research analyst ‘killed’ for criticising the company.
In pre-trial hearings, Lynch’s lawyers have objected to the prosecution including the corporate video as evidence, saying it was ‘innocuous banter’.
They accused the prosecutors,
who also want to flag up to jurors their client’s penchant for Bond villains, of engaging in character assassination. ‘HP was not defrauded and got exactly what it bargained for,’ say his lawyers.
They argue that HP’s case is simply ‘a case study in buyer’s remorse’, and that the U.S.-company – which paid 66 per cent more for Autonomy than its market value – knew exactly what it was getting.
Desperate to expand its business beyond building computers and printers, Hewlett-Packard ruined the software company through its own mismanagement of it, Lynch’s team contends.
raised in Chelmsford, essex, by working class Irish parents – his father was a fireman, his mother a nurse – Lynch won a scholarship to a private school in east London, and later a place at Cambridge University, where he studied maths, physics and biochemistry.
He went on to earn a PhD in mathematical computing. He started his first company in the late 1980s with just £2,000.
HE HAD had established Cambridge Neurodynamics by 1 9 9 1 , which specialised in computer-based fingerprint recognition, and co-founded Autonomy Corporation just five years later.
The latter soon became a leading light of Silicon fen, the nickname for the cluster of tech companies around Cambridge that was Britain’s answer to Silicon Valley. By 2010, the company was so successful that Lynch signed a £20 million shirt sponsorship deal with Tottenham Hotspur.
As his star rose with it, Lynch was embraced by the British establishment.
In 2006, he was awarded an OBE for services to enterprise, and appointed to the BBC’s executive board the following year. He also became a trustee of the royal Botanic Gardens, Kew, a fellow of the royal Society and Deputy Lieutenant of Suffolk. In 2011, he was appointed to the science and technology council by then prime minister, David Cameron.
Sadly for Mike Lynch, such garlands may count for precious little with the American jurors asked to consider whether he ripped off one of their country’s most celebrated tech companies.