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Criminal charges against Autonomy's Lynch will never be dropped, even if extradition bid fails, says lawyer
Plus: All his former Deloitte auditors can be made to testify against him
The US government will never drop its criminal charges against Autonomy founder Mike Lynch "even if extradition were refused," his US attorney has told a British court.
Chris Morvillo, Lynch's US legal representative, said to Westminster Magistrates' Court yesterday afternoon: "Even if extradition were refused, the judge would not dismiss the charges against Mr Lynch in the US, in the event Mr Lynch was apprehended outside the United Kingdom and brought to the United States. The charges wouldn't disappear."
Morvillo, a partner in the US branch of law firm Clifford Chance, was replying to questions from District Judge Michael Snow. The judge is presiding over the US's attempt to extradite Lynch from London to stand trial on 17 criminal charges.
As world + dog knows, Lynch has been accused by HPE of cooking Autnomy's books to inflate its buy price. HP - as was - paid $11bn for the company in 2011 and 15 months later wrote down the value of that purchase by $8.8bn, alleging they were swindled.
Most of the American lawyer's evidence addressed why Lynch should be tried in the UK and not in the US. One of the arguments Lynch's team has deployed is the idea that Britain's Serious Fraud Office (SFO) could still prosecute him in London, something Morvillo was keen to emphasise.
In written submissions he told the judge that key US witnesses such as Christopher "Stouffer" Egan, the former head of US sales at Autonomy, were subject to deferred prosecution agreements with US prosecutors, saying: "The express terms require the cooperators to testify at the request of the Government in any trial or proceeding. There is nothing on the face of the agreements that limits their application to testimony in US courts, nor is there any reason I can see that the government would not request that its witnesses, as part of their cooperation, offer testimony on behalf of the SFO in any UK trial."
The US disputes this and the court will hear from more witnesses about that later this week. If the witnesses truly can be called to a UK court, this is an argument against extradition to America.
Today the court also heard from Lynch's UK solicitor, Kelwin Nicholls, also of law firm Clifford Chance. Summarising the US attitude towards his evidence, barrister Mark Summers QC for the US government asked Nicholls: "Do you accept you have overstepped the line and advocated for Dr Lynch?"
Nicholls replied: "No, I don't."
His evidence was largely focused on why the list of US criminal charges against Lynch was "misleading," in what could be interpreted as an attack on its credibility. He also criticised the US's use of a Financial Times article (£) as proof that Lynch had owned a house in the US, declaring it contained "factual errors" in his written witness statement.
Nicholls also said with regard to Autonomy's US shareholding in July 2011 – a month before its fateful buyout by HP – that just 36.66 per cent of its shares were owned in the US. American prosecutors say this figure was "approximately 47 per cent."
Voluntary agreements all round
The hearing also highlighted how a group of former Deloitte auditors who oversaw Autonomy's accounts have reached voluntary agreements with the US government – meaning they can be asked to testify against Autonomy founder Mike Lynch in a future US criminal trial.
"The Government ultimately agreed to direct Deloitte witnesses to appear if Mr. Hussain wanted to call them as defence witnesses," said Chris Morvillo in a witness statement for the extradition hearing, referring to ex-Autonomy CFO Sushovan Hussain's criminal trial in the US. The head beancounter was convicted of fraud and sentenced to five years by an American court in May 2019.
The existence of the voluntary agreements was mentioned in court filings seen by The Register during the extradition hearing in London, though they were also brought up during the lengthy High Court trial in 2019-20 as part of HPE's $3.3bn UK civil claim against Lynch and Hussian.
Former Deloitte auditors Richard Knights and Nigel Mercer are among the people who have made these agreements with American prosecutors, along with Lee Welham and Tom Murray. The voluntary agreements are different from deferred prosecution agreements, which mean the person subject to them can be forced to testify in court on pain of being prosecuted themselves.
Knights and Mercer were fined hundreds of thousands of pounds each by Britain's accounting regulator last month after it ruled they had failed in their duties as independent examiners of Autonomy's books.
The extradition hearing continues. ®