(Bloomberg) — U.K. tech mogul Mike Lynch took the witness stand and absolved himself of responsibility for what U.S. prosecutors say was a “massive” fraud in Silicon Valley, the sale of his software startup for $11 billion to Hewlett Packard Co. 13 years ago.
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He has already lost a civil trial in London in 2022 over the ill-fated acquisition of his Autonomy Corp., which in 2011 was Britain’s second-largest technology company. Now, Lynch is fighting criminal charges that he cheated Hewlett Packard into paying billions of dollars more.
Lynch began his testimony Thursday in San Francisco federal court by telling the jury he had watched a parade of government witnesses over the past 10 weeks whom he had never met, recalling discussions and accounting decisions in which he was not involved.
“I had a lot of reactions to what I heard, but I think it can all be summed up in one word: it’s surreal,” he said.
The once prominent businessman was asked by his own lawyer whether Autonomy was “perfect”.
“Of course it wasn’t perfect,” he said. “The reality of life is that it is nuanced and confusing and sometimes you do your best to get through it, and companies are just like that.”
Read more: UK Tech Star Lynch makes risky move to testify in US fraud trial
It is rare for white-collar defendants to take the risk of testifying because prosecutors have wide latitude to ask them questions about the behavior, choices, conversations and motivations that led to the crimes they are accused of. Lynch faces up to 25 years in prison if convicted of the most serious charge against him.
Prosecutors alleged that Autonomy used a series of accounting tricks to make its revenue growth look better than it was, such as retroactive contracts, pretending to ship goods, and overpaying for unnecessary services to get suppliers to buy products from Autonomy. Autonomy.
Lynch told the jury that he delegated work in which he was not an expert, joking that he could write code, “but not sell taffy.” He claimed ignorance of some of the irregularities attributed to him and denied other accusations.
“If you take a microscope into a spotless kitchen, you will find bacteria,” he said.
Lynch was accused of recognizing sales to dealers even when those dealers had no “real” customers to buy their product. But Lynch said Thursday that Autonomy had millions of people around the world using its software.
“And that’s the definition of real,” he said.
He has distanced himself from Sushovan Hussain, the former Autonomy chief financial officer who was convicted of fraud by a San Francisco jury in 2018 and sentenced to five years in prison.
Read more: Tech Tycoon Lynch called mastermind of ‘massive fraud’ by US
The jury received much of the same evidence and witness testimony that helped Hewlett Packard persuade the London judge to conclude two years ago that Lynch and Hussain inflated Autonomy’s revenues to induce the sale. Hewlett Packard asked the U.K. judge for $4 billion in damages, though he said he was likely to award “substantially less.”
Lynch also testified at the civil trial, telling the court that former Hewlett Packard CEO Meg Whitman was “lost” and botched the integration of the deal.
The San Francisco trial is now in the final stretch, and both sides are expected to finish presenting evidence next week. The case will then proceed to closing arguments and the jury will deliberate on a verdict.
The case is US v. Lynch, 18-cr-00577, U.S. District Court, Northern District of California (San Francisco).
(Updates with Lynch testimony from 11th paragraph)
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