Ex-Autonomy CFO Is Indicted For Fraud

U.S. federal authorities have accused Autonomy's former finance chief officer of carrying out a 'scheme' to deceive investors, regulators and HP.

Autonomy CFO Indictment 2
U.S. federal prosecutors have indicted the former chief financial officer of British software firm Autonomy on criminal charges including conspiracy and wire fraud, in the latest fallout from HP's 2011 acquisition of the company.In a 12-page indictment, the U.S. Department of Justice accused Sushovan Hussain, who was Autonomy's finance director at the time of the $11 billion (£8.7bn) acquisition, of "intimidating, pressuring, and paying off" those who questioned his company's financial practices.Criminal chargesBeginning in 2009, he allegedly masterminded an elaborate scheme intended to deceive investors, analysts, regulators and auditors, and to attract potential buyers such as HP, prosecutors said.The indictment, filed on Thursday, follows a four-year investigation by U.S. authorities and means Hussain faces a criminal trial in San Francisco. If found guilty, he could serve up to 20 years in prison and be liable for a multi-million dollar sanction.The acquisition, the largest-ever buyout of a European technology firm, was intended to spearhead HP's move into software, but instead HP a year later wrote off three-quarters of what it had paid. In September HPE sold its software business, including the Autonomy operation, to British IT firm Micro Focus for only $8.8 billion (£7bn).Last year HP sued Hussain and Autonomy co-founder Mike Lynch for $5.1 billion in London's High Court of Justice, making similar claims of fraud, in a case believed to be the largest-ever civil prosecution of British nationals.Both have denied such claims, and Lynch countersued HP for $160m last year, saying at the time the company had ruined his reputation and that it was "incompetent in its operation of Autonomy," leading to the acquisition's failure. Neither case is expected to go to court before 2018.HPE’s 'catastrophic failings'British regulators opened a major investigation in February 2013, after HP made its first complaint about Autonomy's accounting practices, and the Serious Fraud Office dropped the case in January of last year, citing insufficient evidence.Hussain has retained John Keker, the U.S. attorney who defended cyclist Lance Armstrong of doping charges and successfully prosecuted White House aide Oliver North in the Iran-Contra affair.Keker said in a statement Hussain would be "a[c]quitted at trial" and he accused U.S. officials of helping HP to "blame others for its own catastrophic failings.""Mr. Hussain is a UK citizen who properly applied UK accounting rules for a UK company," he stated. "This issue does not belong in a U.S. criminal court."HPE did not immediately respond to a request for comment.What do you know about Uber, Airbnb and the startup scene? Try our quiz!