Former Autonomy CFO Convicted Of Wire Fraud

[nitpicker]

https://www.justice.gov/usao-ndca/pr/former-autonomy-cfo-convicted-wire-fraud

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Monday, April 30, 2018

Former Autonomy CFO Convicted Of Wire Fraud

Defendant Defrauded Hewlett-Packard Company of $11.7 Billion During HP’s 2011 Acquisition of Autonomy

SAN FRANCISCO – Sushovan Hussain, the former Chief Financial Officer of Autonomy Corporation plc, was convicted of one count of conspiracy, fourteen counts of wire fraud and one count of securities fraud by a federal jury today, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The verdict follows a two-month trial before the Honorable Charles R. Breyer, U.S. District Judge.
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In 2011, Hewlett-Packard Company acquired Autonomy, the former software technology company, for about $11.7 billion. The evidence at trial demonstrated that for more than two years prior to the sale, Hussain, 54, a citizen and resident of the United Kingdom, falsely inflated Autonomy’s revenues to make it appear Autonomy was growing when it really was not. Specifically, Hussain used backdated contracts, roundtrips, channel stuffing, and other forms of accounting fraud to inflate Autonomy’s publicly-reported revenues by as much as 14.6% in 2009, 17.9% in 2010, 21.5% in the first quarter of 2011, and 12.4% in the second quarter of 2011.

In addition, Hussain, and his co-conspirators, fraudulently concealed from investors and market analysts the scale of Autonomy’s hardware sales, which were used to boost the company’s reported top-line revenue. Autonomy’s total revenues included re-sold hardware of approximately $53.3 million in 2009, $99.08 million in 2010, $20.09 million in the first quarter of 2011, and $20.85 million in the second quarter of 2011. The evidence at trial demonstrated that Hussain falsely suggested to Autonomy investors and analysts that the loss-generating hardware revenue was really high-margin software revenue.

On November 10, 2016, a federal grand jury indicted Hussain charging him with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and 14 counts of wire fraud, in violation of 18 U.S.C. § 1343. On May 4, 2017, the federal grand jury handed down a superseding indictment adding one count of securities fraud. The Jury convicted the defendant on all counts in the superseding indictment.

Until its acquisition by HP on October 3, 2011, Autonomy Corporation plc was a company incorporated in England and Wales with a registered office in Cambridge, United Kingdom. Autonomy was the holding company of a group of companies engaged in software development and distribution. Autonomy maintained dual headquarters in San Francisco, California, and Cambridge. Autonomy’s major subsidiaries included Autonomy, Inc., with offices in San Francisco and San Jose; Interwoven, Inc., with offices in San Jose; and ZANTAZ, Inc., with offices in Pleasanton. Until 2011, Autonomy was a public company whose shares were listed on the London Stock Exchange under the trading symbol “AU” and were bought, held, and sold by individuals and entities throughout the United States. Autonomy reported total revenues of approximately $739 million in 2009 and approximately $870 million in 2010.
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