Analysis: New York can follow U.S. "roadmap" in Goldman cyber crime case

Tue Aug 14, 2012 9:00pm EDT
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By Joseph Ax

NEW YORK (Reuters) - The Manhattan district attorney has been handed a rare prosecutorial roadmap in his criminal case against a former Goldman Sachs computer programmer accused of stealing trading code from the bank.

The office of Cyrus Vance, which could announce a formal grand jury indictment of programmer Sergey Aleynikov at a court appearance on Wednesday, will have the benefit of most, if not all, of the investigative material and trial evidence that the U.S. Justice Department used at Aleynikov's federal trial.

While Aleynikov's conviction at that 2010 trial was ultimately reversed by an appeals court, the evidence underlying the earlier case could prove valuable to state prosecutors who will not have to start from scratch as they pursue their charges. Aleynikov is now being charged under state laws, not federal.

The renewed prosecution of Aleynikov, which stems from accusations that the New Jersey programmer copied proprietary Goldman code before departing for a high-frequency trading startup, comes as U.S. authorities are on a push to tackle complex cyber crime. Aleynikov served about a year of an eight-year federal prison sentence before the 2nd U.S. Circuit Court of Appeals tossed out his conviction in February.

The case represents a chance for Vance to raise the stature of his cyber-crime unit. The most notable cases of the bureau, created in 2010, have targeted identity theft rings. City officials announced Tuesday a $4.2 million appropriation to expand Vance's cyber crime lab, which performs forensic analysis on digital evidence.

The Aleynikov case "demonstrates very powerfully that the D.A.'s office is taking seriously the threats of cyber crime and theft of trade secrets," said Joseph DeMarco, a former federal prosecutor.

Vance's office and the Manhattan U.S. Attorney's office declined to comment.

In the state case, Vance could introduce evidence from Goldman that Aleynikov copied the bank's code and tried to hide his digital tracks, and could introduce investigative material gathered by federal agents and witness testimony from the federal trial.   Continued...

Former Goldman Sachs computer programmer Sergey Aleynikov (L) smiles as he exits Manhattan Criminal Court in New York, August 9, 2012. REUTERS/Brendan McDermid