Case 3:18-cr-00577-CRB Document 301 Filed 01/17/24 Page 1 of 6
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`PATRICK D. ROBBINS (CABN 152288)
`Attorney for the United States
`Acting Under Authority Conferred by 28 U.S.C. § 515
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`MARTHA BOERSCH (CABN 126569)
`Chief, Criminal Division
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`ROBERT S. LEACH (CABN 196191)
`ADAM A. REEVES (NYBN 2363877)
`KRISTINA N. GREEN (NYBN 5226204)
`ZACHARY G.F. ABRAHAMSON (CABN 310951)
`Assistant United States Attorneys
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`450 Golden Gate Avenue, Box 36055
`San Francisco, California 94102-3495
`Telephone: (415) 436-7014
`Fax: (415) 436-7234
`Email: Robert.Leach@usdoj.gov
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`Attorneys for United States of America
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN FRANCISCO DIVISION
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`UNITED STATES OF AMERICA,
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`Plaintiff,
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`v.
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`MICHAEL RICHARD LYNCH and
`STEPHEN KEITH CHAMBERLAIN,
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`Defendant.
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`Case No. CR 18-577 CRB
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`UNITED STATES’ MOTION IN LIMINE NO. 6:
`TO ADMIT THE STATEMENTS OF DR.
`LYNCH’S AGENTS AND DEFENDANTS’ CO-
`CONSPIRATORS AND EXCLUDE CERTAIN
`STATEMENTS IF OFFERED BY DEFENDANTS
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`Pretrial Conference: February 21, 2024
`Trial Date: March 18, 2024
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`INTRODUCTION
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`The trial of Defendants Michael Lynch and Stephen Chamberlain will place before jurors a
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`sophisticated, multi-year conspiracy involving the acts and statements of myriad Autonomy employees.
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`During the conspiracy period between 2009 and 2011, those employees acted at the direction of
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`Autonomy’s chief executive officer—Defendant Lynch. Their statements within the scope of their
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`employment are therefore properly admissible against Defendant Lynch. See FED. R. EVID.
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`801(d)(2)(D). In addition, Rule 801 supports the admission, against both Defendants, of statements by
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`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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`Case 3:18-cr-00577-CRB Document 301 Filed 01/17/24 Page 2 of 6
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`their co-conspirators, such as Sushovan Hussain, in furtherance of the conspiracy to commit wire fraud.
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`See Fed. Rule Evid. 801(d)(2)(E). With this motion, the government seeks an order that the statements
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`of Autonomy employees within the scope of their employment are admissible against Dr. Lynch, and
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`that statements by the Defendants’ co-conspirators in furtherance of the conspiracy are admissible
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`against both Defendants, subject to objections grounded in other principles.
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`But that agency relationship is not a two-way street: Neither Defendant Lynch nor Chamberlain
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`may rely on Rule 801(d)(2)(D) to admit the out-of-court statements of Autonomy employees—just as
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`they may not admit their own hearsay statements, or co-conspirator statements under Rule 801(d)(2)(E).
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`The relevant rules turn on the direction of admission and convert hearsay statements into “not hearsay”
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`only when those statements are “offered against an opposing party.” FED. R. EVID. 801(d)(2). The
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`Court should enforce these rules at trial, and require that Defendants introduce only competent evidence
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`from the stand, or out-of-court statements that come within a recognized hearsay exception.
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`FACTUAL BACKGROUND
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`The facts as relevant to this motion are simple: Between 1996 and 2011, Defendant Lynch served
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`as the founder and Chief Executive Officer of Autonomy. In that role, as the United Kingdom court
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`overseeing Hewlett-Packard’s civil fraud trial found, Lynch was the “eminence grise” of a “cabal” that
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`ran the company. See Judgment ¶ 101, ACL Netherlands BV v. Lynch, [2002] EWHC 1178 (Ch) (May
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`17, 2022), 2022 WL 01557021. Autonomy’s auditors at Deloitte observed that Lynch had “a very
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`unusual level of control” over the company, so much so that Dr. Lynch’s approval was required for any
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`purchase over $30,000. See Trial Ex. 4422 at p.2 & 3. Indeed, the U.K. court would later find that
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`Lynch “exercised very personal overall control [at Autonomy]. He was very definitely and insistently at
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`the apex of an unusual management structure . . . . He was a very dominant personality. He expected to
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`get his way, and did so. He was resourceful and determined; and he did not expect or tolerate doubts
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`from others as to his chosen strategy, and he expected his strategies to be implemented.” See Judgment
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`¶ 98, ACL Netherlands BV v. Lynch, [2002] EWHC 1178 (Ch) (May 17, 2022), 2022 WL 01557021.
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`LEGAL STANDARD
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`Rule 801 defines hearsay as “a statement that: (1) the declarant does not make while testifying at
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`the current trial or hearing; and (2) a party offers in evidence to prove the truth of the matter asserted in
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`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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`Case 3:18-cr-00577-CRB Document 301 Filed 01/17/24 Page 3 of 6
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`the statement.” FED. R. EVID. 801(c). Subpart (d) of that rule identifies certain statements that are “not
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`hearsay,” including statements offered against an opposing party and
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`(A) . . . made by the party in an individual or representative capacity;
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`(B) . . . one the party manifested that it adopted or believed to be true;
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`(C) . . . made by a person whom the party authorized to make a statement on the subject;
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`(D) . . . made by the party’s agent or employee on a matter within the scope of that relationship
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`and while it existed; or
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`(E) . . . made by the party’s coconspirator during and in furtherance of the conspiracy.
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`FED R. EVID. 801(d)(2) & 802. “The rule specifies five categories of statements for which the
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`responsibility of a party is considered sufficient to justify reception in evidence against [her].” Id.
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`advisory comm. note.
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`ARGUMENT
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`A.
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`The Court Should Admit Against Defendant Lynch Statements by Autonomy and
`Autonomy Employees If Offered By the Government.
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`The Ninth Circuit has repeatedly affirmed admission under Rule 801(d)(2)(D) of statements by
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`employees of companies controlled and managed by an individual defendant. For example, in United
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`States v. Kirk, 844 F.2d 660 (9th Cir. 1988), the government charged the founder of a time share venture
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`with conspiracy, wire fraud, and other offenses. Kirk “ran the day-to-day operations” and exercised
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`“control over the time share scheme.” Id. at 661. The Ninth Circuit affirmed the conviction and
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`admission of testimony from “Paradise Palms salespeople[] and co-defendants,” holding that the
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`statements “were admissible as nonhearsay statements of agents or employees under Fed. R. Evid.
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`801(d)(2)(D).” Id. at 663. The Ninth Circuit further stated: “Many of the statements cited by Kirk as
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`instances of hearsay were made by agents or employees of Paradise Palms. The statements primarily
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`described the nature and quality of the time share units, and the nature and extent of contractual
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`obligations to prospective time share customers, therefore clearly falling within the scope of agency or
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`employment.” Id.
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`Similarly, in United States v. Gibson, 690 F.2d 697, 699 (9th Cir. 1982), the government brought
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`mail fraud, wire fraud, and other charges against Gibson, the founder and president of Gibson Marketing
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`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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`Case 3:18-cr-00577-CRB Document 301 Filed 01/17/24 Page 4 of 6
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`International, Inc. (“GMI”), which sold franchises and franchise distributorship rights. Id. at 697. At
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`trial, the government introduced evidence of statements by GMI employees and salesmen against
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`Gibson. The Ninth Circuit found no error in admitting the statements. The Ninth Circuit held that
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`testimony by investors as to statements made by GMI employees were not hearsay but evidence of
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`existence of the scheme. Id. at 700-701. The court added that “even if the testimony did fall within the
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`hearsay definition, it would be admissible under either Rule 801(d)(2)(D) (statements by an agent) or
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`Rule 801(d)(2)(E) (statements by a co-conspirator).” Id. at 701.
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`B.
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`The Court Should Admit Against Both Defendants Statements by Co-Conspirators
`in Furtherance of the Conspiracy If Offered By the Government.
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`Federal Rule of Evidence 801(d)(2)(E) also provides an independent basis for admission of
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`statements by Lynch and Chamberlain’s co-conspirators, such as Hussain, against both Defendants.
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`Accordingly, the Court should admit against Defendant Lynch and Defendant Chamberlain relevant
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`statements by co-conspirators in furtherance of the conspiracy.
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`Count One of the Superseding Indictment charges Defendants Lynch and Chamberlain with
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`conspiracy to commit wire fraud. Between January 2009 and October 2011, the Defendants and others
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`conspired to devise a fraudulent scheme to deceive purchasers and sellers of Autonomy securities about
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`the true performance of Autonomy’s business by making false and misleading statements about
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`Autonomy’s finances, sales and performance. Statements of co-conspirators made in furtherance of this
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`conspiracy are admissible. See Fed. R. Evid. 801(d)(2)(E).1
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`Under Rule 801(d)(2)(E), a “statement made by a coconspirator of a party during the course and
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`in furtherance of the conspiracy” is admissible against that party as non-hearsay. Bourjaily v. United
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`States, 483 U.S. 171, 175 (1987); United States v. Crespo de Llano, 838 F.2d 1006, 1017 (9th Cir.
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`1987). To admit a statement, the government must only provide “slight evidence” that the declarant was
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`connected to the conspiracy. United States v. Perez, 658 F.2d 654, 658 (9th Cir. 1981); see also United
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`On August 8, 2023, in compliance with this Court’s scheduling order and Criminal Local Rule
`16-1(c)(4), the United States served notice to Defendants that it may offer at trial co-conspirator
`statements made by the following individuals: John Baiocco, Stephen Chamberlain, John Cronin,
`Christopher Egan, Lisa Harris, Sushovan Hussain, Andy Kanter, Michael Lynch, Peter Menell, Alan
`Rizek, David Truitt, and Steve Truitt. The government further disclosed that the substance of those
`individuals’ statements had been disclosed in the government’s pre-trial discovery or in the trial of
`United States v. Hussain.
`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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`States v. Saelee, 51 F. 4th 327, 342 (9th Cir. 2022) (“the Government ‘need show only a slight
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`connection with the conspiracy.’”) (quoting United States v. Castaneda, 16 F.3d 1504, 1507 (9th Cir.
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`1994)). This Court through Hussain has become familiar with the evidence of conspiracy that the
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`United States may adduce during Defendants’ trial. A convenient summary of some of that “extensive
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`evidence” can be found in this Court’s July 30, 2018 order denying Hussain’s motions for new trial and
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`judgment of acquittal. See generally Order Denying Motions for New Trial and Judgment of Acquittal
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`at 3-19, United States v. Hussain, Case No. CR 16-462-CRB (N.D. Cal. July 30, 2018), ECF No. 419
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`(describing evidence presented in government’s case-in-chief).
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`C.
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`The Court Should Preclude Defendants from Offering Their Own Out-Of-Court
`Statements and Those of Co-Conspirators.
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`Although the government may admit Autonomy employees’ out-of-court statements against
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`Defendant Lynch, Rule 801(d)(2)(D) does not permit Defendants to adduce their own statements, those
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`of Autonomy employees, or those of co-conspirators. Blackletter hearsay law precludes a defendant
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`from introducing his own prior statements unless an exception applies. See, e.g., United States v.
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`Mitchell, 502 F.3d 931, 964 (9th Cir. 2007) (defendant’s attempt to elicit exculpatory statements he
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`made during interviews with agents was improper because “[t]hese statements were inadmissible
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`hearsay; as [defendant] was attempting to introduce them himself, they were not party-opponent
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`admissions”); United States v. Ortega, 203 F.3d 675, 682 (9th Cir. 2000) (“[T]he district court did not
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`abuse its discretion when it limited Ortega’s ability to elicit his exculpatory hearsay statements on cross-
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`examination” because otherwise “Ortega would have been able to place his exculpatory statements
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`before the jury without subjecting himself to cross-examination, precisely what the hearsay rule
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`forbids.”) (internal quotation omitted).
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`As for the “not hearsay” provisions of Rule 801(d)(2)—which include the employee and co-
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`conspirator exceptions—they are unavailable to Defendants. The rule plainly limits its operation to
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`statements offered “against an opposing party” where the statement was made by “the party’s agent or
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`employee,” Fed. R. Evid. 801(d)(2)(D), or by “the party’s coconspirator,” Fed. R. Evid. 801(d)(2)(E).
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`Because the United States neither employed Autonomy’s employees nor conspired with them,
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`Defendants cannot use those rules to put coconspirator or Autonomy statements before the jury. See,
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`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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`e.g., United States v. Maliszewski, 161 F.3d 992, 1011 (6th Cir. 1988) (“Here, the government was the
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`party against whom the statement was offered, and we feel confident that Edward does not mean to
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`suggest that the government was a member of the conspiracy. That fact precludes admission.”). The
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`Court should require that Defendants adduce only competent testimony.
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`CONCLUSION
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`For these reasons, the Court should admit against Defendant Lynch the statements of Autonomy
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`and Autonomy employees. The Court should admit against both Defendant Lynch and Defendant
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`Chamberlain relevant statements by co-conspirators in furtherance of the conspiracy. And the Court
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`should preclude Defendants from offering hearsay statements, including the statements of Autonomy
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`employees and of Defendants’ co-conspirators.
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`DATED: January 17, 2024
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` PATRICK D. ROBBINS
` Attorney for the United States Attorney
` Acting Under Authority Conferrred by
` 28 U.S.C. § 515
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`By:
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`/s/ Zack Abrahamson
`ROBERT S. LEACH
`ADAM A. REEVES
`KRISTINA N. GREEN
`ZACHARY G.F. ABRAHAMSON
`Assistant United States Attorneys
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`U.S. MOT. IN LIMINE RE: HEARSAY STATEMENTS
`CR 18-577 CRB
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