In a wood-panelled San Francisco court in May, tech tycoon Mike Lynch described his modest upbringing in an Irish family living near London. The multimillionaire businessman grew up in the 1970s at the height of the Troubles, difficult years for the Irish in Britain. “There were times you had to learn to run fast,” he told the jury.
Lynch’s mammoth trial before judge Charles Breyer was the biggest fraud case in the history of Silicon Valley, epicentre of the tech industry. He had been extradited from Britain in chains after an FBI investigation into the disputed $11 billion (€9.95 billion) sale of his UK software company Autonomy to Hewlett-Packard (HP), the ailing US computer giant. He personally realised more than $500 million.
Accused first by HP and then by American prosecutors of using financial chicanery to extract a higher price for the company, Lynch always denied any wrongdoing. He was finally acquitted of all 15 charges in June, ending house arrest under armed guard and 24-hour surveillance. He was in tears at the verdict, the jury accepting he was focused on technology and not on accounting. His co-accused, Stephen Chamberlain, a former Autonomy finance executive, was also acquitted.
The trial’s conclusion seemed like an epic reprieve. In a storied rise-and-fall career marked as much by bitter legal conflict as the accumulation of outsize wealth, Lynch was facing a sentence of up to 20 years. With a lung condition and poor hearing, he feared he might die a prisoner.
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‘My partner and I are renting an apartment for the same price we were paying to share with five others in Dublin – and we’re 10 minutes from the beach’
“It’s so wonderful to be home,” he told an Irish friend by text message after returning to his farm in Suffolk.
Still, the freedom he regained was fleeting. A summer of celebration came to a catastrophic end in the predawn hours of Monday when a freak storm struck his superyacht 700m off the coast of Sicily. Lynch’s wife, Angela Bacares, one of 15 passengers and crew rescued from the sea, was legal owner of the Bayesian. The luxury vessel, 56m long with one of the world’s tallest masts, plunged to the seabed within minutes. The Italian manufacturers have claimed it should have been “unsinkable”.
One crew member was confirmed dead on Monday as rescue divers embarked on a complex search in treacherous waters for Lynch, his 18-year-old daughter Hannah and four guests. The grim mission went on for days, hope fading all the time with diving time underwater limited to 12 minutes. Blocked by narrow corridors and debris, rescuers eventually used a hydraulic jack to force open sliding doors that led to the lounge. Four bodies were lifted from the wreck on Wednesday and a fifth on Thursday. Hannah Lynch’s body was discovered on Friday by specialist divers. She was due to start university in the autumn. “She’s got a place at Oxford to do poetry and literature,” Lynch told the court.
In an extraordinary twist, Lynch’s co-accused, Chamberlain, died after he was hit by a car while out running on Saturday near his home in Cambridgeshire. UK police said there was no evidence his death was “suspicious or untoward”.
The casualties of the sunken boat include Chris Morvillo, the lawyer who represented Lynch and cross-examined him before Breyer only weeks ago.
Lynch had told the story of his life in the 17th-floor courtroom that San Francisco day in May. He was born in Ilford on the outskirts of London in 1965, his English-born father a fireman from a Co Cork family. His mother, from Co Tipperary, was a nurse who rose to lead the casualty unit in the National Health Service hospital where she worked. “She was a formidable woman at organising things in real time.”
Morvillo asked: Was Lynch well-off growing up? “No, we weren’t. The family story is that the day after they got married they had to go and beg the bank manager for a loan, which was £4, I think that’s about $6, so we always joke in the family that we started from minus $6 and we sort of measure it from there.”
Such roots were formative. “I guess the thing to understand is that the Irish community in America is quite strong. In England it was more seen as the immigrant community, so probably analogous to other communities here,” Lynch said.
“But there was particular complexity in the 1970s because you may have heard of the Troubles in Northern Ireland. Well, there were terrible Troubles in Northern Ireland, but the IRA were putting bombs off in London. And although there were many Irish people in London who would never countenance anything like that, there were occasions where you had to read the room.”
As a youth, he worked as a cleaner in the hospital where his mother worked – “I’m still a demon mopper” – and then as hospital porter. In addition to “wheeling people around in beds and the odd dead body”, he was sent around the wards “with a big trolley and a big old aluminium teapot” serving hot drinks and sandwiches to patients.
Lynch learned not to judge from afar, he said. “Very wealthy people would sometimes treat you with great kindness or could be awful and people who probably had a similar job to your one could be wonderful and kind or they could be awful, and it was just down to the individuals, and you got to interact with a lot of people.”
A curious child and a gifted student, he won a scholarship aged 11 “for the education of poor boys”. The award was inaugurated centuries ago by a lord mayor of London: “So a great irony of life is a man in the 1600s actually changed mine.” He attended the private Bancroft’s School in Essex, necessitating a long commute. He took lifts from people who worked in the direction of his school, seizing the opportunity to talk with older people “and hearing about the world from them for two hours each day”.
He studied science at Cambridge, supporting himself through university in the 1980s by designing music synthesisers. He graduated with a doctorate in mathematical computing, going on to a post-doctoral research fellowship.
He co-founded Autonomy with Cambridge pals in 1996, the catalyst being when he was approached with “a very specific problem”. Police hunting a serial killer of 13 people needed help to make sense of data they held but could not interrogate, Lynch’s area of expertise. “It turned out that on about victim six or seven the police would have had enough information if they could put it together to catch him and save the other victims.”
Lynch described how “five of us in a room” started Autonomy from scratch: “So a group of eccentric people working really hard on a project, no bureaucracy, no admin, lots of late nights, lots of eating cold pizza with, you know, tools from the toolbox, because there was no cutlery and, you know, that sense of mission, which is the kind of environment that is wonderful to work in.”
Their niche was in an arcane branch of computing known as unstructured data analysis. Autonomy developed a system called Idol – intelligent data operating layer – which exploited probability-based theories to make sense of information gathered in emails, web pages, call-centres and CCTV that was beyond the reach of searchable databases. This proved lucrative.
The platform enabled financial institutions to monitor emails and phones for suspicious conduct. Autonomy had 20,000 customers. Clients included “global leaders in the fields of consulting and professional services, media, pharmaceuticals and healthcare, telecommunications, aerospace, ecommerce, legal and manufacturing, as well as… government agencies, intelligence defence and technology services and… the public sector”.
The business floated on the London stock exchange in 2005, joining the elite FTSE 100 list of top-valued companies three years later. In the US-dominated tech sector, Autonomy was seen as a rare British success story. More than two-thirds of its reported $870 million revenues in 2010 came from the American market. The company struck a £20 million shirt sponsorship deal with Tottenham Hotspur, the north London soccer team. A long way from hospital teapots.
By then, Lynch’s life was transformed. His Irish friend recalled a meeting of powerful minds when Lynch hit it off with Russian chess grandmaster Gary Kasparov at a meal in Scott’s, the upscale London restaurant. “I thought to myself there’s lot of brain there: these two enormous heads stuffed with all the brains in the world, leaning in chatting about the future of the world. He was a much bigger man than his money.”
Autonomy’s 2011 sale to HP made Lynch’s fortune but it was a disaster for the buyer. The Silicon Valley stalwart was floundering, its traditional personal computer business laid low by weak profit margins and surging demand for Apple iPhones and iPads. HP chief Leo Apotheker aimed to rebuild via Autonomy software, with higher margins and profitability. He paid a 64 per cent premium over Autonomy’s share price for the keys to Lynch’s empire, twice the usual 30 per cent.
HP investors took fright, sending the shares down. Within weeks, Apotheker was out. His successor was Meg Whitman, former chief of ecommerce group eBay. She reputedly spent $140 million of her own money in a failed Republican campaign to become governor of California. Although Whitman hailed Autonomy technology as “almost magical”, the deal quickly unravelled. After one year, HP cut the value of its investment by $8.8 billion, claiming it was victim of a $5 billion fraud from “serious accounting improprieties, disclosure failures and outright misrepresentations”.
For Lynch, this was seismic. HP’s claims about the botched deal, which he strenuously denied, would overshadow the rest of his life.
He had been hailed as Britain’s answer to Bill Gates of Microsoft or Steve Jobs of Apple, billionaire geeks whose companies bestride the world. He had an OBE for services to enterprise. When David Cameron was British prime minister, Lynch advised him. He served as a non-executive director of the BBC and the British Library.
For all that, the UK serious fraud office opened a criminal investigation in 2013. The case was dropped after two years because of “insufficient evidence”.
Still, the US investigations continued. Although his friend found Lynch’s Irishness “was not a big deal” for him, he was still conscious of his right to citizenship. As extradition to the US loomed, the friend quietly approached an Irish official asking whether Lynch might benefit from informal Irish consular assistance in dealings with the Americans. This went nowhere, the friend said, speaking on condition of anonymity.
When Lynch was finally handed over to US marshals in Heathrow airport last year, the odds seemed stacked against him. Pew Research Centre data showed only 0.4 per cent of US federal criminal defendants were acquitted in 2022 after pleading not guilty and going to trial. Then there was the conviction of former Autonomy chief financial officer Sushovan Hussain, sent to prison for five years in 2018 in a case before the same judge, Breyer.
Furthermore, HP won a UK high court civil case against Autonomy’s founder. The judge said Lynch was the “éminence grise” who shared with Hussain knowledge of impropriety in the way aspects of the business were accounted for and disclosed. “For the acquisition to proceed at the price agreed, both knew that the false presentation had to be maintained.”
But that was not how the San Francisco jury saw it and set Lynch free. This was the prelude to the fateful Mediterranean trip, now the subject of a big maritime investigation.
In court three months ago, Lynch said he learned as a teenage hospital porter that no one is invincible. “On the geriatric wards the nurses were too busy to spend a lot of time with the patients, so they didn’t mind you talking to the patients, so I would always do that last,” he said.
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“You’re talking to a 95 year old and they know they’re not going to leave the hospital and they tell you all the things they wouldn’t tell anyone else and you hear about their lives.
“It’s a good lesson and you realise that each day is important, and there will be an arc of existence. And what that led to me doing was realising, you know, get on with it. Do stuff. Whatever it is you want to do, just do it.”
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