Accused Goldman Sachs code pilferer sues FBI for 'wrongful arrest'

Claims unlawful search, malicious prosecution

A former programmer for banking firm Goldman Sachs who has been accused of stealing company secrets has filed suit against the FBI agents who arrested him for allegedly violating his constitutional rights.

Sergey Aleynikov, 45, has been battling it out in the courts ever since his 2009 arrest on charges that he absconded with code from Goldman Sachs' proprietary high-speed trading software, in violation of the federal Economic Espionage Act (EEA).

He was convicted in 2011 and sentenced to prison time and a fine, but an appeals court later overturned his conviction and ordered his immediate release, saying the EEA didn't apply to the crimes of which he was accused. By that point, Aleynikov had already served 11 months in prison.

He wasn't out of the woods yet, though. In 2012, Manhattan District Attorney Cyrus Vance filed new charges against Aleynikov on behalf of the state of New York, accusing him of "unlawful use of scientific material" and "unlawfully duplicating computer-related material."

Aleynikov is due to stand trial on those charges on April 1, but in the meantime he has taken the offensive. Reuters reports that he has sued FBI agents Michael McSwain and Eugene Casey and some other, unnamed agents, on grounds that his arrest and prosecution were both prejudicial and illegal.

According to the complaint filed in the US District Court of Newark, New Jersey, which was obtained by Bloomberg:

The unconstitutional malicious prosecution of Aleynikov was designed not to serve the interests of justice but to curry favor with an influential corporation intent on punishing one of its most talented officers who chose to leave the firm and, in the process, sending a message to other employees and prospective employees that Goldman Sachs is willing and able to use the American criminal justice system as its own private enforcement arm.

The suit alleges that not only were Aleynikov's arrest and the subsequent search of his home unlawful because the agents didn't get warrants, but that the FBI violated Aleynikov's civil rights again when they forwarded evidence to the Manhattan DA's office.

In December, the judge in Aleynikov's original trial ruled that the property seized during the search of his home – including computers and thumb drives – should have been returned after his conviction was reversed. Instead, it became the basis of the New York State charges.

Aleynikov's suit against the FBI agents comes just days after he also sued Goldman Sachs in an effort to have the firm advance him his legal fees to defend against a civil suit it filed against him over his alleged code theft.

Reuters reports that Aleynikov has already incurred more than $3m in court costs related to the civil suit, and he has asked that the case be put on hold pending his upcoming criminal trial. ®


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