The former CFO of Autonomy has been convicted of a massive accounting fraud for misrepresenting the British software company’s financial condition and growth prospects before it was acquired by Hewlett-Packard in 2011.
A San Francisco jury on Monday found Sushovan Hussain, 54, guilty of one count of conspiracy, 14 counts of wire fraud and one count of securities fraud, agreeing with federal prosecutors that he, in effect, duped HP into purchasing Autonomy for about $11.7 billion.
“From 2009 to 2011, Sushovan Hussain misused his special skills in accounting to falsely inflate Autonomy’s revenues,” Alex Tse, acting U.S. Attorney for the Northern District of California, said in a news release.
“The defendant then touted Autonomy’s false and misleading financial statements to senior executives at Hewlett-Packard Company, and eventually defrauded HP of over $11.7 billion,” he added.
During the six-week trial, prosecutors presented evidence that Hussain used backdated contracts, round-trips, 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.
Hussain faces a maximum of 20 years in prison at his sentencing on May 4. His attorney, John Keker, said the verdict will be appealed.
“Mr. Hussain defrauded no one and acted at all times with the highest standards of honesty, integrity and competence,” Keker said, adding, “It is a shame that the United States Department of Justice lent its support to HP’s campaign to blame others for its own catastrophic failings.”
According to Reuters, “The Autonomy deal was supposed to form the central part of HP’s move into software but instead led the U.S. company a year later to write-off three-quarters of Autonomy’s value.”
Hussain was indicted in November 2016 on the conspiracy and wire fraud counts and the securities fraud count was added in May 2017. His conviction, if upheld, “would offer some vindication to HP executives who have long alleged Autonomy’s management cooked the books before one of its biggest acquisitions,” The Wall Street Journal said.