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NY judge narrows state's case against former Goldman programmer

By Bernard Vaughan

A New York state judge on Friday significantly narrowed the evidence the Manhattan district attorney can use in its case against a former Goldman Sachs computer programmer accused of stealing secret code from the bank.

State Supreme Court Justice Ronald Zweibel, in Manhattan, held that prosecutors cannot use as evidence a laptop and other physical evidence the FBI had obtained in an earlier federal action against the former programmer, Sergey Aleynikov.

Zweibel also held that the district attorney's office cannot introduce statements that Aleynikov made before he was read his Miranda rights when the FBI arrested him in 2009, as there was no probable cause for the arrest.

"There is no doubt that these statements must also be suppressed as the fruit of the poisonous tree as a result of defendant's illegal arrest," Zweibel wrote in a 71-page ruling.

Aleynikov was initially charged by federal prosecutors, who accused him of stealing trading code from Goldman Sachs Group Inc GS.N in 2009 as he prepared to join a high-frequency trading startup firm in Chicago. He was found guilty in 2010, but a federal appeals court in New York later overturned the verdict, saying that federal corporate espionage laws did not cover Aleynikov's alleged illegal activity. Aleynikov was released after spending nearly a year in prison.

In August 2012, Manhattan District Attorney Cyrus Vance Jr. charged Aleynikov with two felonies under New York state law: unlawful use of secret scientific material and unlawful duplication of computer related material.

The evidence included the laptop, a flash drive and computers the FBI seized in its search of Aleynikov and his home, which they later gave to Vance's office after Aleynikov's federal conviction was overturned. Zweibel said that it was "improper" of the FBI to give the evidence to the district attorney's office even after Aleynikov requested that the property be returned.

"This constituted an unauthorized seizure and retention of defendant's property that was unreasonable under the circumstances," Zweibel wrote.

Zweibel denied Aleynikov's motion to suppress statements he made to the FBI after he was read his Miranda rights.

In a statement, Aleynikov's lawyer, Kevin Marino, said Zweibel's decision gutted the district attorney's case and was "another important step on Sergey Aleynikov's long journey to complete vindication."

The Manhattan district attorney's office declined to comment.

Last year, Zweibel denied Aleynikov's motion to dismiss the case, saying Aleynikov did not show that the charges brought by Vance amounted to double jeopardy.

Aleynikov was featured in author Michael Lewis's book "Flash Boys" earlier this year.

The case is People v. Aleynikov, New York State Supreme Court for New York County, No. 04447/2012.

(Reporting by Bernard Vaughan; Editing by Leslie Adler)

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