Ex-Goldman Programmer Is Arrested Again

The legal odyssey of Sergey Aleynikov, the former Goldman Sachs programmer, took a surprising turn on Thursday, when the Manhattan district attorney charged him with state crimes related to his downloading computer code from his onetime employer.

The charges come less than six months after an appeals court overturned Mr. Aleynikov's conviction on federal criminal charges related to the identical conduct.

“If you're Sergey Aleynikov you have to be thinking, ‘why did he ever leave Russia?'” Kevin Marino, his lawyer, said standing on the courthouse steps on Thursday beside his client, who emigrated to the United States two decades ago.

“But be that as it may, we look forward to vigorourously defending him against these charges,” Mr. Marino said.

The district attorney charged Mr. Aleynikov with the unlawful use of secret scientific material, a felony under New York state law. If convicted, he could serve between one and four years in prison.< /p>

“This code is so highly confidential that it is known in the industry as the firm's ‘secret sauce,”' said Cyrus R. Vance, the Manhattan district attorney. “Employees who exploit their access to sensitive information should expect to face criminal prosecution in New York State.”

Both Mr. Vance and Preet Bharara, the United States attorney in Manhattan, have made the prosecution of corporate espionage and high-tech theft a top priority of their offices.

Mr. Aleynikov was arraigned on Thursday afternoon at state criminal court in lower Manhattan. Wearing a T-shirt, shorts and handcuffs, the wiry and bearded Mr. Aleynikov stood silently. His lawyer, Mr. Marino, said his client was not guilty and asked the judge to release him on bail pending further proceedings.

Judge Robert Mandelbaum ordered Mr. Aleynikov to forfeit his passport and released him on a $35,000 bond.

Mr. Aleynikov, 42, has already served jail time for his misconduct.

Federal authorities arrested Mr. Aleynikov more than three years ago after Goldman reported him to the United States attorney in Manhattan. He was accused him of stealing the bank's highly confidential code for its high frequency trading operations when he left the bank to join a start-up. The case shined a spotlight on high-frequency trading, which uses complex computer algorithms to make thousands of lightning-fast trade that exploit tiny price discrepancies.

After a federal jury convicted Mr. Aleynikov in December 2010, he served one year of an 8-year sentence in at a federal prison in Fort Dix, N.J. But in February, an appeals court reversed his conviction, ruling that prosecutors misapplied the federal corporate-espionage laws against Mr. Aleynikov.

”In prison you learn to appreciate your life day by day,” Mr. Aleynikov said after being set free earlier this year. ”Today is a victory, but tomorrow you never know.”

It is unusual, yet hardly unp recedented, for federal and state prosecutors to bring criminal charges against a defendant connected to the same set of facts. The “dual sovereignty doctrine” permits different sovereigns - in this case, the United States and New York state - to pursue charges for the same conduct.

For instance, after a state jury cleared a group Los Angeles police officer of misconduct in the beating of Rodney King, federal prosecutors brought civil charges against the officers and secured two guilty verdicts.

There are rare circumstances, however, in which federal and state prosecutors can violate the United States Constitution's protection against double jeopardy, which holds that a citizen cannot be tried twice for the same crime. A federal appeals court in Manhattan has ruled that double jeopardy may be violated despite single prosecutions by separate sovereigns when one prosecuting sovereign can be said to be acting in concert.

Joshua Dressler, a criminal law pro fessor at Ohio State University, said that it is highly unlikely that the separate federal and state prosecutions would violate the Constitution.

“It's very rare that double jeopardy would come into play in a case like this,” Mr. Dressler said. “The Supreme Court decided this in 1922 and it's been settled law ever since.”

Yet Mr. Marino emphasized the double jeopardy issue during Thursday's arraignment. He accused the Manhattan district attorney's office of acting as a tool of the United States Department of Justice and said this prosecution violated the double jeopardy clause. He told the judge that his client was preparing to file malicious-prosecution lawsuits against Goldman Sachs and the federal government.

Mr. Marino has always acknowledged that his client made a mistake in violating Goldman's confidentiality rules, but continues to maintain that he did commit any crimes and that Goldman had suitable remedies in civil court.

Some lawyer s on Thursday said that they weren't too surprised by second set of charges brought by the Manhattan district attorney against Mr. Aleynikov. They cited the interest of both Mr. Bharara and Mr. Vance in the area of intellectual-property theft. And because the federal appeals court ruled that the facts in this case did not fit the federal computer-theft statutes, it made sense that the state prosecutor would use his own tools to charge Mr. Aleynikov.

“This is an exceptionally justifiable reason for the state prosecutor to use a state law to bring a prosecution,” said Mr. Dressler, the Ohio State professor.

On Thursday, Mr. Marino called the prosecution “fishy.” Standing on the state courthouse steps just a few hundred yards from the federal courthouse where Mr. Aleynikov had been tried last year, he accused the two offices of colluding against his client.

“It's hard to imagine that it's come to this,” said Mr. Marino. “Things don't work out for the govenrment in the federal case so you go around the corner and charge him in state court.”