Ex-Autonomy CFO Sushovan Hussain loses US appeal bid against fraud convictions and 5-year prison sentence
(2020/08/27)
- Reference: 1598537350
- News link: https://www.theregister.co.uk/2020/08/27/sushovan_hussain_autonomy_appeal_loss/
- Source link:
Former Autonomy CFO Sushovan Hussain has lost a US appeal bid against [1]his criminal conviction for fraud committed during the [2]sale of the British software company to Hewlett-Packard back in 2011 .
"We hold that Hussain's wire fraud convictions did not involve an impermissible extraterritorial application of United States law to foreign conduct because the 'focus' of the wire fraud statute is the use of the wires in furtherance of a scheme to defraud, and Hussain used domestic wires to perpetrate his fraud," the US Ninth Circuit Court of Appeals [3]ruled yesterday [PDF].
Hussain had appealed against his [4]14 US wire fraud convictions for his part in the Autonomy scandal, where Hewlett-Packard (as was) paid $11bn for the British company before [5]writing it down by $8.8bn and crying foul .
The three-judge American appeals court, sitting in San Francisco, added: "A reasonable jury could conclude that Hussain's approval of false and misleading financial information in an HP press release distributed to the investing public reflected a fraudulent scheme 'in connection with' US securities."
The court ruled that Hussain's convictions were safe and did not need to be overturned, stating:
Six counts stemmed from phone or video conference calls among participants in the United Kingdom and California, five counts focused on emails originating or terminating in California, and three involved press releases distributed from England to California. Since each count of wire fraud involved the use of a domestic wire, each conviction is a domestic application of the statute.
A joint press release issued by HP and Autonomy in 2011, announcing the former's sale to the latter, stated that Autonomy would "enhance HP's financial profile". While not strictly untrue in the everyday language of people baffled by HP's decision-making, its legal meaning was enough to earn Hussain a criminal conviction – as was the assertion that Autonomy's margins were nudging 87 per cent gross.
Hussain's [6]sentence was 60 months in prison , along with fines totalling $10.1m and three years of post-prison probation. He will begin his prison term later this year, the sentence having been stayed during his appeal.
A UK civil case brought by Hewlett Packard Enterprise against Hussain and Autonomy CEO Mike Lynch concluded in January, though the High Court has yet to deliver judgment. Hussain had refused to testify to the High Court in the belief that American prosecutors would use his testimony in the UK as extra ammunition for the US case against him. That refusal [7]did not impress trial judge Mr Justice Hildyard , who remarked in court at the closing of the case: "We rather regard any resort to the privilege against self-incrimination as a black mark."
Lynch is currently in the early stages of [8]an extradition attempt by the US authorities on a [9]bundle of criminal charges that were extended halfway through the High Court proceedings.
The former Autonomy CEO denies all wrongdoing over the Autonomy buyout, having told the court he acted on the advice of auditors from Deloitte who cleared Autonomy's accounting practices. He was indicted [10]alongside former in-house accountant Stephen Chamberlain . ®
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[1] https://www.theregister.com/2019/05/14/sushovan_hussain_autonomy_cfo_jailed_5_years/
[2] https://www.theregister.com/2011/08/19/hp_buys_autonomy/
[3] https://regmedia.co.uk/2020/08/27/19-10168_documents_opinion.pdf
[4] https://www.theregister.com/2018/04/30/autonomy_cfo_sushovan_hussain_guilty/
[5] https://www.theregister.com/2012/11/20/hp_alleges_autonomy_fraud/
[6] https://www.theregister.com/2019/05/14/sushovan_hussain_autonomy_cfo_jailed_5_years/
[7] https://www.theregister.com/2020/01/15/sushovan_hussain_autonomy_role_wildly_overblown/
[8] https://www.theregister.com/2020/02/05/mike_lynch_submits_himself_for_arrest/
[9] https://www.theregister.com/2019/03/23/mike_lynch_new_charges/
[10] https://www.theregister.com/2018/11/30/mike_lynch_autonomy_fraud_charge/
[11] https://whitepapers.theregister.com/
"We hold that Hussain's wire fraud convictions did not involve an impermissible extraterritorial application of United States law to foreign conduct because the 'focus' of the wire fraud statute is the use of the wires in furtherance of a scheme to defraud, and Hussain used domestic wires to perpetrate his fraud," the US Ninth Circuit Court of Appeals [3]ruled yesterday [PDF].
Hussain had appealed against his [4]14 US wire fraud convictions for his part in the Autonomy scandal, where Hewlett-Packard (as was) paid $11bn for the British company before [5]writing it down by $8.8bn and crying foul .
The three-judge American appeals court, sitting in San Francisco, added: "A reasonable jury could conclude that Hussain's approval of false and misleading financial information in an HP press release distributed to the investing public reflected a fraudulent scheme 'in connection with' US securities."
The court ruled that Hussain's convictions were safe and did not need to be overturned, stating:
Six counts stemmed from phone or video conference calls among participants in the United Kingdom and California, five counts focused on emails originating or terminating in California, and three involved press releases distributed from England to California. Since each count of wire fraud involved the use of a domestic wire, each conviction is a domestic application of the statute.
A joint press release issued by HP and Autonomy in 2011, announcing the former's sale to the latter, stated that Autonomy would "enhance HP's financial profile". While not strictly untrue in the everyday language of people baffled by HP's decision-making, its legal meaning was enough to earn Hussain a criminal conviction – as was the assertion that Autonomy's margins were nudging 87 per cent gross.
Hussain's [6]sentence was 60 months in prison , along with fines totalling $10.1m and three years of post-prison probation. He will begin his prison term later this year, the sentence having been stayed during his appeal.
A UK civil case brought by Hewlett Packard Enterprise against Hussain and Autonomy CEO Mike Lynch concluded in January, though the High Court has yet to deliver judgment. Hussain had refused to testify to the High Court in the belief that American prosecutors would use his testimony in the UK as extra ammunition for the US case against him. That refusal [7]did not impress trial judge Mr Justice Hildyard , who remarked in court at the closing of the case: "We rather regard any resort to the privilege against self-incrimination as a black mark."
Lynch is currently in the early stages of [8]an extradition attempt by the US authorities on a [9]bundle of criminal charges that were extended halfway through the High Court proceedings.
The former Autonomy CEO denies all wrongdoing over the Autonomy buyout, having told the court he acted on the advice of auditors from Deloitte who cleared Autonomy's accounting practices. He was indicted [10]alongside former in-house accountant Stephen Chamberlain . ®
Get our [11]Tech Resources
[1] https://www.theregister.com/2019/05/14/sushovan_hussain_autonomy_cfo_jailed_5_years/
[2] https://www.theregister.com/2011/08/19/hp_buys_autonomy/
[3] https://regmedia.co.uk/2020/08/27/19-10168_documents_opinion.pdf
[4] https://www.theregister.com/2018/04/30/autonomy_cfo_sushovan_hussain_guilty/
[5] https://www.theregister.com/2012/11/20/hp_alleges_autonomy_fraud/
[6] https://www.theregister.com/2019/05/14/sushovan_hussain_autonomy_cfo_jailed_5_years/
[7] https://www.theregister.com/2020/01/15/sushovan_hussain_autonomy_role_wildly_overblown/
[8] https://www.theregister.com/2020/02/05/mike_lynch_submits_himself_for_arrest/
[9] https://www.theregister.com/2019/03/23/mike_lynch_new_charges/
[10] https://www.theregister.com/2018/11/30/mike_lynch_autonomy_fraud_charge/
[11] https://whitepapers.theregister.com/
For justice!
I like fruits
Disclaimer: I don't have deep understanding of the case, your sense of justice may differ from mine and the judges', etc.
Meanwhile, British case awaits judgment
Arthur the cat
I thought we had abandoned extradition
Anonymous Coward
After the lady who killed the kid on the motorbike fled justice in the UK and refused to return.
Why would the UK government even respond to any US requests for extradition when such an egregious case is outstanding?
IOW Guilty. Very.
John Smith 19
Oh and BTW the extradition thing....
Non symmetric standards of proof.
Tony Blairs little love token during his bromance with "W"*
*Stands for Walker. Although I can think of a few other words that would be appropriate, some of them quite close to walker.
"We rather regard any resort to the privilege against self-incrimination as a black mark."
MiguelC
Wow, just wow.
They're basically saying that the whole point of the existence of that privilege (if you can call it that) is for defendants to imply their guilt by using it?
It'll be interesting to see what happens with the criminal charges if HP lose the case in the UK.
(opens popcorn...)