Ex-Goldman programmer faces second U.S. trial on code theft charges

[April 01, 2015]   By Brendan Pierson

NEW YORK (Reuters) - A former Goldman Sachs Group Inc <GS.N> computer programmer charged with stealing code from the investment bank is scheduled to go on trial on Wednesday, the second time in five years he will be in front of a jury for essentially the same accusations.

The trial for Sergey Aleynikov, 45, is scheduled to take place in Manhattan state court over a 2009 episode in which Goldman says he stole the computer code as he prepared to leave for a high-frequency trading startup.

Aleynikov’s case inspired "Flash Boys," Michael Lewis’ best-selling book last year about high-frequency trading.

Aleynikov went to prison after his first trial, when a jury in federal court convicted him of violating a corporate espionage law. An appeals court threw out the conviction, saying the anti-espionage law did not apply and setting him free after about a year.

The U.S. Constitution generally bars prosecuting someone twice for the same crime, a concept known as double jeopardy, but the prohibition is not absolute.
 

A Manhattan state judge ruled in 2013 that New York prosecutors could pursue Aleynikov even though the earlier case brought by federal prosecutors collapsed. State Supreme Court Justice Ronald Zweibel ruled that the federal and state charges were different, and he said that the federal case was dismissed because the indictment, rather than the evidence, was inadequate.

Aleynikov faces 1-1/2 to four years in prison if convicted a second time. His sentence after the first trial was eight years.

The computer programmer moved to the United States from Russia in 1990 and remains a dual citizen. He joined Goldman in 2007. The startup he was planning to join was Teza Technologies in Chicago.

About six months after the federal appeals court set Aleynikov free, Manhattan District Attorney Cyrus Vance revived the case in state court and charged him in August 2012 with unlawful use of secret scientific material and unlawful duplication of computer-related material.

Aleynikov scored a victory last June when Zweibel ruled that prosecutors cannot use a laptop and other evidence the Federal Bureau of Investigation obtained for the federal case.

Kevin Marino, Aleynikov's lawyer, said he would raise the double jeopardy issue on appeal if Aleynikov is convicted.

"Mr. Aleynikov has now waited two and one half years to fight these charges," Marino said. "He is very anxious to finally begin presenting his defense on Wednesday."

Vance's office declined to comment.

The case is People v. Aleynikov, New York State Supreme Court, New York County, No. 60353/2012.

(Reporting by Brendan Pierson; Editing by David Ingram and Lisa Shumaker)

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