Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 1 of 19
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`Jonathan Matthew Baum (SBN: 303469)
`Steptoe LLP
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`One Market Street
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`Steuart Tower, Suite 1070
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`San Francisco, CA 94105
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`Telephone: (510) 735-4558
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`jbaum@steptoe.com
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`Reid H. Weingarten
`Brian M. Heberlig
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`Michelle L. Levin
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`Nicholas P. Silverman
`Dwight J. Draughon
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`Drew C. Harris
`Steptoe LLP
`1114 Avenue of the Americas
`New York, NY 10036
`Telephone: (212) 506-3900
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`Christopher J. Morvillo
`Celeste L.M. Koeleveld
`Daniel S. Silver
`(Admitted Pro Hac Vice)
`Clifford Chance US LLP
`31 West 52nd Street
`New York, NY 10019
`Telephone: (212) 878-3437
`christopher.morvillo@cliffordchance.com
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`Attorneys for Defendant
`Michael Richard Lynch
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`UNITED STATES DISTRICT COURT
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` NORTHERN DISTRICT OF CALIFORNIA
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`Plaintiff,
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`vs.
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`UNITED STATES OF AMERICA,
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`MICHAEL RICHARD LYNCH and
`STEPHEN KEITH CHAMBERLAIN,
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`Defendants.
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`Case No.: 3:18-cr-00577-CRB
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`Judge: Hon. Charles Breyer
`DEFENDANT MICHAEL RICHARD
`LYNCH’S MOTION IN LIMINE TO
`EXCLUDE CERTAIN CATEGORIES OF
`EVIDENCE
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`(Lynch MIL No. 5)
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`Date: February 21, 2024 at 2 p.m.
`Court: Courtroom 6 – 17th Floor
`Date Filed: January 17, 2024
`Trial Date: March 18, 2024
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
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`I.
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 2 of 19
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`TABLE OF CONTENTS
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`Page Nos.
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`MOTION TO EXCLUDE EVIDENCE OF OTHER ALLEGED WRONGS
`OR BAD ACTS ................................................................................................................. 1
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`A.
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`B.
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`C.
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`Introduction ............................................................................................................. 1
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`Legal Standard ........................................................................................................ 1
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`Evidence Regarding Autonomy Analyst Daud Khan Should be Excluded ............ 2
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`1. Factual Background ................................................................................................... 2
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`2. Discussion .................................................................................................................. 3
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`a. The evidence is not admissible under Rule 404(b) ................................................. 3
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`b. The evidence is not admissible under Rule 403 ...................................................... 5
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`D.
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`Evidence Regarding the Terminations of Hogenson, Tejada, and Prasad and the
`Settlements of Their Lawsuits Should be Precluded .............................................. 6
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`1. Factual Background ................................................................................................... 6
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`2. Discussion .................................................................................................................. 7
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`II. MOTION TO EXCLUDE EVIDENCE OF TRANSACTIONS THAT
`PREDATE THE ALLEGED CONSPIRACY ................................................................ 9
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`III. MOTION TO EXCLUDE IRRELEVANT AND PREJUDICIAL
`EVIDENCE OF BEHAVIOR ........................................................................................ 10
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`IV. CONCLUSION ............................................................................................................... 12
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 3 of 19
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`TABLE OF AUTHORITIES
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`Cases
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` Page Nos.
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`Huddleston v. United States,
`485 U.S. 681 (1988) ................................................................................................................ 4, 7
`
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`Hudspeth v. Comm'r,
`914 F.2d 1207 (9th Cir. 1990) .................................................................................................... 8
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`Rhoades v. Avon. Prod., Inc.,
`504 F.3d 1151 (9th Cir. 2007) .................................................................................................... 8
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`United States v. Bailleaux,
`685 F.2d 1105 (9th Cir. 1982) .................................................................................................... 1
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`United States v. Berckmann,
`971 F.3d 999 (9th Cir. 2020) .................................................................................................. 1, 4
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`United States v. Charley,
`1 F.4th 637 (9th Cir. 2021) ..................................................................................................... 1, 4
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`United States v. Hussain,
`16-cr-462-CRB-1, ECF No. 245 (N.D. Cal. Feb 9, 2018) ........................................................ 11
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`United States v. Miller,
`874 F. 2d 1255 (9th Cir. 1989) ................................................................................................... 2
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`United States v. Preston,
`873 F.3d 829 (9th Cir. 2017) ...................................................................................................... 1
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`Statutes and Rules
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`Fed. R. Evid. 401 ............................................................................................................................ 1
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`Fed. R. Evid. 402 ............................................................................................................................ 1
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`Fed. R. Evid. 403 ................................................................................................................ 1, 5, 8, 9
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`Fed. R. Evid. 404 ................................................................................................................ 1, 2, 3, 4
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`Fed. R. Evid. 408 ............................................................................................................................ 8
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`iii
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 4 of 19
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`NOTICE OF MOTION AND MOTIONS
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`TO ALL PARTIES AND THEIR COUNSEL OF RECORD IN THIS ACTION:
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`PLEASE TAKE NOTICE that on February 21, 2024, at 2:00 pm or as soon thereafter as
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`counsel may be heard, in Courtroom 6, 17th Floor of the United States District Court for the
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`Northern District of California, 450 Golden Gate Avenue, San Francisco, CA 94102, Defendant
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`Michael Richard Lynch will and hereby does move the Court to exclude certain categories of
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`evidence, including evidence relating to Daud Khan, an Autonomy analyst; evidence pertaining
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`to the terminations of three Autonomy finance employees; evidence predating the alleged
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`scheme; and irrelevant and prejudicial evidence of behavior.
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`This motion is based upon the following Memorandum of Points and Authorities, the
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`Declaration of Celeste L.M. Koeleveld, any oral argument, and the pleadings and exhibits on file
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`with the Court.
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`Dated: January 17, 2024
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` Respectfully submitted,
`/s/ Christopher J. Morvillo
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`Christopher J. Morvillo (Admitted Pro Hac Vice)
`Celeste L. Koeleveld (Admitted Pro Hac Vice)
`Daniel S. Silver (Admitted Pro Hac Vice)
`Clifford Chance US LLP
`31 West 52nd Street
`New York, NY 10019
`Telephone: (212) 878-3437
`christopher.morvillo@cliffordchance.com
`
`Reid H. Weingarten (Admitted Pro Hac Vice)
`Brian M. Heberlig (Admitted Pro Hac Vice)
`Michelle L. Levin (Admitted Pro Hac Vice)
`Nicholas P. Silverman (Admitted Pro Hac Vice)
`Dwight J. Draughon (Admitted Pro Hac Vice)
`Drew C. Harris (Admitted Pro Hac Vice)
`Steptoe LLP
`1114 Avenue of the Americas
`New York, NY 10036
`Telephone: (212) 506-3900
`
`
`
`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 5 of 19
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`Jonathan M. Baum (SBN: 303469)
`Steptoe LLP
`One Market Street
`Steuart Tower, Suite 1070
`San Francisco, CA 94105
`Telephone: (510) 735-4558
`jbaum@steptoe.com
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`
`Attorneys for Defendant
`Michael Richard Lynch
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`v
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 6 of 19
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`SUMMARY OF ARGUMENT
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`Defendant Michael Richard Lynch moves in limine to exclude evidence of uncharged
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`conduct and other acts. Specifically, Dr. Lynch moves to preclude reference to, or introduction
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`of, the following evidence:
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`(i)
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`evidence that Autonomy's management team allegedly retaliated against Daud
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`Khan, an Autonomy analyst;
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`(ii)
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`evidence that Dr. Lynch "caused" the terminations of three employees of
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`Autonomy's U.S. finance team and approved of later settlements;
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`evidence of innocuous humor within Autonomy;
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`evidence of alleged bullying or intimidating behavior on the part of Dr. Lynch;
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`(iii)
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`(iv)
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`and
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`(v)
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`evidence of Dr. Lynch and his family's wealth, including references to property
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`the family own and to the proceeds Dr. Lynch's wife—like all Autonomy
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`shareholders who tendered their shares to HP—received following the acquisition.
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`As explained further in this motion in limine, this evidence should be excluded as irrelevant and
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`inadmissible. This evidence is not related to the accounting allegations in this case and would
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`unduly prejudice Dr. Lynch. Moreover, this evidence would create multiple trials within a trial
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`as Dr. Lynch would be required to explain or defend unrelated conduct, which would in turn
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`cause delay and confuse the jury. Dr. Lynch's motion should be granted to ensure that evidence
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`that seeks to distract the jury and impugn Dr. Lynch's character is not admitted.
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`vi
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 7 of 19
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`MEMORANDUM OF POINTS AND AUTHORITIES
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`I.
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`MOTION TO EXCLUDE EVIDENCE OF OTHER ALLEGED WRONGS OR
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`BAD ACTS
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`A.
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`Introduction
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`Defendant Michael Richard Lynch moves to preclude evidence of uncharged conduct and
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`other acts. On December 15, 2023, the government advised Dr. Lynch that it intends to offer
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`evidence, pursuant to Federal Rule of Evidence 404(b), about (i) alleged interactions with Daud
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`Khan, a JP Morgan securities analyst, who covered Autonomy, and (ii) the terminations of
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`certain employees of Autonomy's finance department and subsequent settlements of lawsuits
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`filed by those employees against Autonomy. This evidence serves no apparent purpose besides
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`suggesting to the jury that Dr. Lynch and his colleagues were vindictive. The conduct is
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`unrelated to the charges in this case, and to the extent it involves Dr. Lynch at all, it does so only
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`tangentially. The evidence should be excluded as irrelevant under Federal Rules of Evidence
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`401 and 402, and inadmissible under Rules 403 and 404(b).
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`B.
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`Legal Standard
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`Under Rule 404(b), evidence of bad acts may not be admitted to show criminal
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`propensity, but instead may be admitted only to prove "motive, opportunity, intent, preparation,
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`plan, knowledge, identity, absence of mistake, or lack of accident." United States v. Berckmann,
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`971 F.3d 999, 1002 (9th Cir. 2020). The government bears the burden of proving that the
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`proposed other act evidence satisfies four criteria: "(1) the evidence tends to prove a material
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`point (materiality); (2) the other act is not too remote in time (recency); (3) the evidence is
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`sufficient to support a finding that [the] defendant committed the other act (sufficiency); and (4) .
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`. . the act is similar to the offense charged (similarity)." United States v. Charley, 1 F.4th 637,
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`647 (9th Cir. 2021) (citation omitted). "But even then, '[t]he use of such evidence must be
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`narrowly circumscribed and limited.'" Id. (citing United States v. Bailleaux, 685 F.2d 1105,
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`1109 (9th Cir. 1982)). "When seeking to introduce other act 404(b) evidence for the purpose of
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`proving intent, the proposing party must show that the other 'act is similar to the offense
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`charged.'" United States v. Preston, 873 F.3d 829, 840 (9th Cir. 2017). Otherwise, the other act
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 8 of 19
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`"does not tell the jury anything about what the defendant intended . . . unless, of course, one
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`argues (impermissibly) that the [other] act establishes that the defendant has criminal
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`propensities." Id. (citing United States v. Miller, 874 F.2d 1255, 1269 (9th Cir. 1989)).
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`C.
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`Evidence Regarding Autonomy Analyst Daud Khan Should be Excluded
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`Dr. Lynch moves to preclude the government from presenting evidence about, or
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`referring to, alleged retaliation against Mr. Khan by members of Autonomy's management team.
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`In its revised Rule 404(b) notice filed on December 15, 2023, the government states that (i) it
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`intends to introduce evidence that at a meeting with Dr. Lynch and others in 2008, Daud Khan
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`"was threatened that Autonomy would 'take steps' if he published a research note." ECF
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`No. 272-4. The notice continues that (ii) "[a]fter the meeting Autonomy was going to give
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`alleged evidence of wrongdoing by Khan to the United Kingdom's Financial Services Authority
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`["FSA"] if Khan published a research note." Id. The notice further states that (iii) Khan "was
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`prohibited from attending analyst conference calls from Q2 2008 through 2009." Id. The
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`government argues that Dr. Lynch's alleged "threats to analysts . . . evidence his intent to deceive
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`and defraud and consciousness of guilt." Id. This evidence—which mischaracterizes what
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`actually happened—should be excluded because it is irrelevant, highly prejudicial, and will
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`create an unnecessary side show.
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`1.
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`Factual Background
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`The government's notice twists the facts and omits key details about Khan's behavior. In
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`fact, Autonomy reported Khan to the FSA because Autonomy had reason to believe he was
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`engaged in misconduct, not in retaliation for anything Khan sought to publish about Autonomy.
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`To begin with, the government conflates what happened in regard to Khan's research note
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`with what happened with the FSA, whereas Khan did not connect these two events in the
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`Hussain trial. As to the research note, Khan testified that after he shared a copy of the note with
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`Autonomy, as was customary, Dr. Lynch, while making clear that Autonomy "in no way [had]
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`any issue with opinions or conclusions you may draw from the fact of your note," expressed
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`concern about "factual inaccuracies" in the note. Hussain Tr. at 3031:20–3032:1. During a
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`meeting among Khan, David Knox, the head of research at Cazenove (where Khan was
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`2
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 9 of 19
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`employed as an analyst at the time), Dr. Lynch, and Mr. Hussain, Dr. Lynch "objected to
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`[Khan's] calculations of organic growth rates," Hussain Tr. at 3036:15–16, and noted that, as a
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`public company, Autonomy "need[ed] to defend ourselves." Hussain Tr. at 2987:23–24. Khan
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`agreed that as a CEO, Dr. Lynch had a duty to correct something he thought was inaccurate.
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`Hussain Tr. at 3032:20–23. Following the meeting, Khan "did make some edits before
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`publishing the note" in May 2008 "[t]o try to make it more accurate." Hussain Tr. at 3036:20–
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`25. That was the end of the matter. The published note—which discussed Autonomy's
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`acquisition of Verity in 2007—does not concern any transaction in this case.
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`Separately, Autonomy (but not Dr. Lynch) brought concerns about Khan's conduct to the
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`attention of the FSA. Specifically, in May 2008, Andrew Kanter, Autonomy's General Counsel
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`and Chief Operating Officer, brought to the attention of Knox, Cazenove's head of research, and
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`to the FSA that Khan was engaging in inappropriate conversations with fund managers that
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`suggested Khan was engaged in illegal behavior, such as frontrunning. Hussain Tr. at 3039:9–
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`25.1 In his trial testimony, Khan did not tie Kanter's referral to his research note, affirming that
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`"nobody from Autonomy was threatening [him] at this point." Hussain Tr. at 3043:15–17. In
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`light of the referral to the FSA, Kanter advised Khan and Knox that it would be inappropriate for
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`Autonomy to speak directly with Khan, and Khan was excluded from being physically present at
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`Autonomy's earnings calls for a period of time, though he could listen in by phone. Hussain Tr.
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`at 2994:10–13.2
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`2.
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`Discussion
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`a.
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`The evidence is not admissible under Rule 404(b)
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`1 See also Koeleveld Decl. Ex. 1 (Email from Andrew Kanter to David Knox (May 2, 2008,
`9:54) (Government Exhibit 2658) (Bates JPMC-AU-DOJ-00008769)).
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`2 Additionally, in 2009, someone at Autonomy—Khan did not know who—raised concerns that
`Khan was improperly trying to obtain inside information from the former CFO at Intervowen,
`which Autonomy acquired in January 2009. Hussain Tr. at 3064–69. Although Khan denied
`that he was doing anything improper, he conceded that his outreach to the former CFO was
`"slightly unusual" and appreciated that the CFO might be reluctant to answer Khan's questions.
`Id. at 3066:25, 3069:6–7. Given the admittedly unusual circumstances, the referral to the FSA
`was appropriate.
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`3
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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 10 of 19
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`Having to set the record straight about what did and did not happen with Daud Khan
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`would unduly prolong the trial, and the suggestion that Dr. Lynch did anything wrong will be
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`unfairly prejudicial. The evidence of alleged wrongdoing by Dr. Lynch against Mr. Khan should
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`be excluded because it is unrelated to the allegations. As a threshold matter, of the three alleged
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`prior acts relating to Mr. Khan, Dr. Lynch is alleged to have been involved in only one—
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`pointing out inaccuracies in one of Khan's research notes. The evidence that Mr. Kanter reported
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`Mr. Khan to the FSA or that Mr. Khan was excluded from attending earnings presentations in
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`person does not involve Dr. Lynch and should be excluded on that basis alone. See Huddleston
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`v. United States, 485 U.S. 681, 689 (1988) ("[S]imilar act evidence is relevant only if the jury
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`can reasonably conclude that the act occurred and that the defendant was the actor.").
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`Turning to the evidence of Dr. Lynch's comments to Mr. Khan regarding errors in his
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`note, that evidence should be excluded because it fails several requirements under Rule 404(b).
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`First, Mr. Khan's research note did not pertain to any of the transactions involved in the alleged
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`scheme. Moreover, Dr. Lynch's criticism was apparently justified, as Khan made several
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`changes to his note before it was published in May 2008. Lastly, Mr. Khan does not allege that
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`Dr. Lynch pressured him to write anything that was inaccurate. Therefore, the proffered
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`evidence has no bearing on the offense charged. See Charley, 1 F.4th at 647.
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`Second, the alleged bad acts predate the period of the alleged fraud, which begins in
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`January 2009. According to the government's evidence, the meeting with Mr. Khan, Kanter's
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`report to the FSA, and Mr. Khan's subsequent exclusion from earnings presentations all occurred
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`in 2008. The events are not, therefore, coterminous with the alleged fraud. See id.
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`Attenuated as it is from the alleged scheme, the government's evidence is more akin to
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`"evidence of a person's character or trait of character," which is barred by Rule 404(b). See
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`Berckmann, 971 F.3d at 1002. The government intends to offer the evidence to impugn Dr.
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`Lynch's character to imply that he is vindictive or otherwise overbearing. This usage plainly
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`violates Rule 404(b), which provides that evidence is not admissible "to show that on a particular
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`occasion the person acted in accordance with [their] character." Fed. R. Evid. 404(b)(1).
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`Whether or how Dr. Lynch voiced his disagreement with an analyst's ongoing research has no
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`4
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`

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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 11 of 19
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`bearing on the accounting fraud allegations in this case. The proposed evidence relating to Mr.
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`Khan is irrelevant, predates the alleged fraud, and constitutes improper character evidence, and
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`should be excluded.
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`b.
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`The evidence is not admissible under Rule 403
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`Even if the Court were to find that the evidence of interactions between Autonomy
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`management and Mr. Khan is relevant and admissible, the evidence should still be excluded
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`under Rule 403 because it is of minimal probative value, is unduly prejudicial, and would
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`generate a trial within a trial that would cause undue delay.
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`As noted above, the proffered evidence is unrelated to the allegations in this case. Dr.
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`Lynch's comments to Mr. Khan reflect his good faith disagreement with Mr. Khan's analysis
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`regarding an acquisition that is not part of the alleged scheme. The probative value of the
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`evidence, in other words, is negligible. On the other hand, there is a very real risk that the jury
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`will make improper inferences about Dr. Lynch's character, which would cause him undue
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`prejudice.
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`Moreover, the proffered evidence runs the risk of creating several distracting sideshows
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`for the jury regarding events that, again, are irrelevant to the allegations. For example, Mr.
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`Khan's 2008 research note sought to analyze Autonomy's acquisition of a smaller company in
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`2007, which predates and is unrelated to the alleged conduct. If the government is allowed to
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`introduce this evidence, the defense would be forced to point out how Khan's note was
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`inaccurate and why Dr. Lynch brought those errors to his attention—even though the subject
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`matter of that note is not even part of the alleged scheme. Similarly, the evidence about the
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`referral to the FSA would necessarily beg the question whether Mr. Khan in fact engaged in
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`misconduct. Thus, this would open the door to evidence regarding what was reported to the
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`FSA, the basis for that report, and the FSA's ensuing investigation. This would require another
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`detour wholly divorced from the actual allegations in this case. Lastly, evidence of Khan's
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`exclusion from in-person attendance at earnings presentations would lead to testimony regarding
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`who from Khan's firm did attend, whether Khan attended by phone, and the circumstances of his
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`5
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`

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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 12 of 19
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`exclusion (i.e., the FSA investigation), which would again create an unwarranted distraction
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`from the actual allegations.
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`Because the admission of evidence regarding interactions between Mr. Khan and
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`Autonomy's management would lack probative value, prejudice Dr. Lynch, and require several
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`distracting trials within a trial, it should be excluded.
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`D.
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`Evidence Regarding the Terminations of Hogenson, Tejada, and Prasad and
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`the Settlements of Their Lawsuits Should be Precluded
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`The government's 404(b) notice also indicates that it intends to present evidence that Dr.
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`Lynch "caused" the termination of three employees in Autonomy's U.S. finance department—
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`Brent Hogenson, Percy Tejada, and Reena Prasad—and that Dr. Lynch approved "settlements of
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`potential whistleblower claims by them." This evidence should be excluded because it would
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`falsely imply that Autonomy's management engaged in unlawful retaliation against Mr.
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`Hogenson and his team and would cause undue confusion and delay.
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`1.
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`Factual Background
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`Mr. Hogenson was the Chief Financial Officer of Autonomy in the Americas and worked
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`together with Mr. Tejada and Ms. Prasad. In early 2010, Autonomy uncovered fraud in the U.S.
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`payroll department overseen by Mr. Hogenson. Mr. Kanter appointed Joel Scott, Autonomy's
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`U.S. General Counsel, to conduct an investigation into the fraud. Mr. Scott was authorized to
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`review the finance team's practices and reach appropriate conclusions. Mr. Scott hired two
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`outside forensic firms to assist with investigating and reviewing the finance team's practices.
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`The investigations revealed that multiple employees in the finance department had
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`embezzled funds and that Mr. Hogenson had separately violated numerous company policies.
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`For example, Mr. Hogenson was found to have paid reseller fees without approval, returned
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`funds to customers without approval, engaged in questionable travel, submitted false expense
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`reports, and failed to ensure the proper implementation of sufficient controls to detect and
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`prevent payroll fraud. In addition, Mr. Hogenson asked the IT department to wipe his laptop
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`after he fired one of the employees engaged in the fraud, and he involved himself in the payroll
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`fraud investigation even though Mr. Scott asked him not to. After the investigations into the
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`6
`
`

`

`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 13 of 19
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`embezzlement scandal, Autonomy's management consulted with its auditor, Deloitte, and the
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`Audit Committee of the Board and instituted several safeguards within the U.S. finance
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`department, including appointing Mr. Scott to oversee the department, relocating the department
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`to San Francisco, and requiring the department to seek additional authorizations from
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`management in England.
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`As a result of these safeguards, Mr. Scott was authorized to determine whether any
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`current employees implicated in the investigations should be terminated. Mr. Scott decided to
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`terminate Mr. Hogenson and his team members, Mr. Tejada and Ms. Prasad, based on the
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`violations uncovered by the investigations. Mr. Scott has told the government that he "felt, from
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`day one, that there was something odd and untrustworthy about [Mr.] Hogenson," and that he felt
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`that Mr. Hogenson "acted based on his own agenda."3
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`The three terminated employees later threatened to sue for unlawful retaliation. In
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`response, Mr. Kanter negotiated a settlement with each employee, in which there was no
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`admission of liability. Dr. Lynch did not agree with the decision to settle.
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`2.
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`Discussion
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`The evidence of Mr. Hogenson's, Mr. Tejada's, and Ms. Prasad's terminations and later
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`settlements with Autonomy should be excluded for several reasons. First, evidence of the
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`terminations is irrelevant because Dr. Lynch was not involved in the termination decisions. See
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`Huddleston, 485 U.S. at 689. Instead, the terminations followed Mr. Scott's extensive
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`investigations, aided by outside forensic firms, into the embezzlement scandal within the finance
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`department and the discovery of other misconduct by Mr. Hogenson. As the head of the
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`investigation, Mr. Scott exercised his discretionary authority, chose to terminate each employee,
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`and personally notified each employee of his decision. Although Autonomy's management
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`(including Dr. Lynch) discussed and was apprised of the investigation, Mr. Scott ultimately made
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`the decisions to terminate. Contrary to the government's assertion—tellingly rendered using
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`passive voice—Dr. Lynch did not "cause" the terminations to occur. Moreover, any approval by
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`3 Koeleveld Decl. Ex. 2 (Memorandum of an interview with Joel Scott (January 7, 2013) (Bates
`HP-SEC-00329246)).
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO EXCLUDE CERTAIN
`CATEGORIES OF EVIDENCE (LYNCH MIL NO. 5) – 3:18-CR-00577-CRB
`7
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`

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`Case 3:18-cr-00577-CRB Document 291 Filed 01/17/24 Page 14 of 19
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`Dr. Lynch of the final payouts related to the settlements was not in any way related to Mr.
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`Scott’s discretionary decision to terminate Mr. Hogenson, Mr. Tejada, and Ms. Prasad in the first
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`instance. Indeed, Dr. Lynch did not approve of the settlements.
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`Second, the evidence of the settlements is improper and unfairly prejudicial because it
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`suggests that the settlements are an admission of liability. Federal Rule of Evidence 408 bars
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`evidence from settlement negotiations "when offered to prove liability for, invalidity of, or
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`amount of a claim that was disputed." Rhoades v. Avon. Prod., Inc., 504 F.3d 1151, 1160 (9th
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`Cir. 2007) (citing Fed. R. Evid. 408). The rule also applies to settlements with third parties. See
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`Hudspeth v. Comm'r, 914 F.2d 1207, 1213 (9th Cir. 1990). Admitting this evidence to suggest
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`that Dr. Lynch improperly retaliated against the terminated employees and then admitted
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`wrongdoing via Autonomy’s decision to settle would plainly violate Rule 408. It would also
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`ignore the myriad reasons that can inform a settlement agreement, such as an effort to mitigate
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`damages in response to potential litigation risk. Moreover, evidence of the settlements will
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`create a sideshow around the amount of each payout and its justifications, as the jury may
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`incorrectly assume that Autonomy did something wrong merely from the size of the payout to
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`each employee.4 Finally, the prejudicial nature of the settlement evidence would substantially
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`outweigh any probative value, rendering this evidence inadmissible under Rule 403.
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`The Court should exclude evidence relating to the termination of Mr. Hogenson, Mr.
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`Tejada, and Ms. Prasad and later settlements because the evidence is irrelevant and prejudicial,
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`would improperly suggest that the settlements show a consciousness of guilt, and cause undue
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`delay by requiring unnecessary litigation on collateral matters.
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`4 Indeed, that is precisely the conclusion the government urged the jury to draw, improperly, in
`the Hussain trial. See Hussain Tr. at 5782:13–16 ("Ladies and gentlemen, you do not pay that
`kind of money to someone who has made false accusations. Okay? You know that that didn't
`happen. This $750,000 was hush money to B