Sushovan Hussain, the former chief financial officer of U.K. software firm Autonomy, was sentenced to 60 months in prison after being convicted last year on 16 counts of conspiracy, wire fraud, and securities fraud in connection with Hewlett-Packard’s acquisition of Autonomy in 2011.
The sentence was imposed Monday by the Honorable Charles Breyer, U.S. District Judge for the Northern District of California. In addition to the prison term, the court ordered a fine in the amount of $4 million, the forfeiture of assets in the amount of $6.1 million, a three-year term of supervised release, and a special assessment of $1,600. Hussain was ordered to surrender to the custody of the Bureau of Prisons on June 15, 2019.
In 2011, H-P acquired Autonomy for about $11.7 billion. Evidence at trial demonstrated that for more than two years prior to the sale, Hussain used sophisticated accounting methods to falsely inflate 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 percent in 2009, 17.9 percent in 2010, 21.5 percent in the first quarter of 2011, and 12.4 percent 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 revenue. The evidence demonstrated Autonomy’s sales were inflated by $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.
In November 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 On May 4, 2017, the grand jury superseded the indictment, adding one count of securities fraud, in violation of 18 U.S.C. § 1348.