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Mike Lynch, the billionaire founder of the software company Autonomy, could be extradited to the US, a London judge ruled Thursday in a case seen as a test of the willingness of British courts to block the removal of business leaders to the US.
Lynch, one of the UK’s best-known tech entrepreneurs, has been indicted in the US on 17 conspiracy and fraud charges related to Hewlett-Packard’s $11 billion purchase of Autonomy in 2011.
Lynch is accused of manipulating Autonomy’s accounts, causing HP to pay an additional $5 billion for the company. He denies wrongdoing.
His extradition case was heard earlier this year, but the hearings were postponed pending the outcome of a Supreme Court civil fraud case filed against Lynch by Hewlett Packard Enterprise over the Autonomy sale.
But after hearing that the Supreme Court ruling would not be handed down for several months, district judge Michael Snow told Lynch on Thursday that he dismissed his case and did not believe that extradition was an abuse of process.
Mike Lynch said he was “disappointed” that Snow had ruled against him without awaiting the outcome of the High Court case.
He said in a statement: “At the request of the US Department of Justice, the Court has ruled that a British citizen who ran a British company listed on the London Stock Exchange must be extradited to America over allegations of his conduct in the UK . We say this case belongs in the UK.”
Lynch has pledged to appeal if Home Secretary Priti Patel decides to order his removal. Losing parties in extradition cases can file lengthy appeals in the Supreme Court and the Supreme Court.
Lynch’s argument against extradition to the US was based on a defense known as a “forum bar”, which allows the courts to block extradition if much of the alleged criminal activity had taken place in the UK.
His lawyer Alex Bailin QC had argued before the Westminster Magistrates Court earlier this year that the UK Serious Fraud Office had reserved the right to prosecute Lynch in the UK if his extradition is blocked. The SFO dropped its own investigation in 2015 after it surrendered parts of its investigation to the US.
However, the US government has argued that Lynch should be prosecuted in the US because “America was the location of the intended victims of the fraud” and HP’s shareholders were primarily based in the US.
The case has broader significance for British businessmen and sets an important precedent for those accused of criminal misconduct. Bailin told the extradition hearing earlier this year that business leaders “should be held accountable here” because “the US is not the global marshal of business”.
The UK-US extradition treaty signed with the US in 2003 has long been criticized by MPs for favoring the US and being used to target both suspected white-collar suspects and terrorists.
Tory MP David Davis said after the ruling that Lynch’s decision was a “scandal” and that because of the “unfair and unbalanced” extradition treaty, Snow had ignored “every word of a 10-month civil trial” in which the case was pending. was taken. “exhaustive details”.
The forum bar’s argument was initially seen as “toothless” when it was first introduced in 2014, but in recent years judges have relied on it in certain instances where alleged conduct took place in the UK.
In 2018, British courts refused to extradite Stuart Scott, a London-based HSBC banker charged with forex manipulation in the US.
In his statement, Snow said the effects of Lynch’s alleged behavior were being felt in the US, although Lynch was primarily based in the UK. “I am convinced that the huge financial losses HP has suffered in the US, the losses suffered by US investors and the significant reputational damage inflicted on HP strongly support extradition,” he said.
Snow concluded, adding that any attempt by the SFO to prosecute Lynch in the UK would result in “significant additional delay” of any trial. He also criticized one of Lynch’s expert witnesses who testified at the US prison conditions hearings as an “unreliable partisan witness.”
Snow did not have to decide on Lynch’s guilt or innocence of the charges, but only to decide whether the case meets the legal criteria for extradition.