US Air Force accuses Autonomy resellers of cooking the books

Resellers for beleaguered software company Autonomy have been embroiled in accusations of creative accounting, with the US Air Force alleging they counted revenue from uncompleted transactions on its books.

Former Autonomy chief executive Mike Lynch

In a secret memo sighted by the Washington Post, a senior Air Force lawyer has put forward the case for banning Autonomy executives from trade with the US government.

The allegations arose after a investigation into the role of two US companies, MicroTechnologies and Capax Global, into the efforts to boost Autonomy's revenue figures ahead of the UK software company's sale to HP.

At the time, both MicroTechnologies and Capax Global were Autonomy reselllers, according to the Washington Post.

The two companies were involved in government deals, and the USAF says in the memo that MicroTechnologies and Autonomy claimed to have closed out millions in software sales when in fact this never happened.

Autonomy booked US$11 million in March 2010, the memo says, after a deal between MicroTechnologies and an unnamed customer. However, there was no final sale and in the end Autonomy only received US$500,000 from the contract.

HP says the deal that was completed in November 2012 resulted in a shortfall of US$8.8 billion and has accused Autonomy's former chief executive Mike Lynch of accounting fraud. Lynch is denying the allegations and the deal is currently being investigated by British and US serious fraud agencies.