Asthmatic Ex-Autonomy CFO Must Serve Jail Time, Feds Say

By Reenat Sinay
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Law360 (October 1, 2020, 5:05 PM EDT) -- California federal prosecutors said Wednesday a former Autonomy executive's asthma is no reason to let him serve a five-year sentence in home confinement for lying about the software company's financials ahead of its 2011 acquisition by Hewlett-Packard, calling the request an "obvious ploy" to benefit from the pandemic.

Sushovan Hussain told the court last week that COVID-19 will jeopardize his health in prison. The British national also complained that he has been restricted to the Northern District of California since January 2018 when he entered the country to prepare for his trial, and has been unable to see his family since early this year.

But prosecutors said Wednesday that Hussain is "pretending that he has been punished sufficiently by staying in a penthouse apartment in Nob Hill," an affluent San Francisco neighborhood. The self-proclaimed "fitness and health fanatic" is at little risk of contracting the novel coronavirus, the government argued.

"In his motion, Hussain himself cannot muster the chutzpah to claim he has severe-to-moderate asthma. The most he can say is he 'suffers from asthma severe enough to require use of a Salbutamol inhaler,'" the government said. "Granting compassionate release to a 'fitness and health fanatic,' or otherwise reducing the sentence, based on mild asthma would promote disrespect for the law and not provide for just punishment, nor would a reduction reflect the seriousness of the offense, one of the largest frauds in the history of the Northern District." 

"In all events, the court should not reward Hussain's obvious ploy to gain a personal advantage from the ongoing pandemic," prosecutors added.

The government also took issue with Hussain framing his bid for home confinement as a "reduction" of his sentence, arguing that a reduction can only be used to shorten the prison term of a person who is currently incarcerated, not to lessen the severity of a sentence that has yet to be served.

In April 2018, a federal jury unanimously convicted the former Autonomy CFO on all 16 counts of wire and securities fraud that prosecutors lobbed against him. He was later sentenced to five years in prison and ordered to pay $4 million in fines.

During the three-month trial, prosecutors argued Hussain cooked Autonomy's books, made dozens of "garbage" quid pro quo deals, and hid the company's substantial hardware sales between 2009 and 2011, falsely selling the business as a "pure software company" and misrepresenting its sustainability.

Prosecutors said Hussain's lies snowballed and ballooned the company's revenues as the global economy tanked, defying common sense. As a result, the government said HP purchased Autonomy at the inflated price of $11.7 billion and was forced to write off $8.8 billion months after the deal closed in October 2011.

Hussain unsuccessfully appealed his conviction in August. The Ninth Circuit rejected various arguments, including that the U.S. Department of Justice can't bring wire fraud charges extraterritorially because the deal was governed by English securities laws and accounting rules and was conducted in the British pound.

Counsel for Hussain and the U.S. Attorney's Office for the Northern District of California did not immediately respond to requests for comment Thursday.

The government is represented by Assistant U.S. Attorneys Robert S. Leach, William Frentzen and Adam A. Reeves.

Hussain is represented by John W. Keker, Jan Nielsen Little, Brook Dooley, Nicholas D. Marias and Cody Gray of Keker Van Nest & Peters LLP.

The case is U.S. v. Hussain, case number 3:16-cr-00462, in the U.S. District Court for the Northern District of California.

--Additional reporting by Craig Clough. Editing by Amy Rowe.

For a reprint of this article, please contact reprints@law360.com.

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