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Saturday, February 18, 2012

Can Your Employer Get You Prosecuted?

If you're worried about crony capitalism, meet its new bastard twin crony justice, in the form of what looks like one of the most feared institutions on the planet getting its way with federal prosecutors as to which of its former employees would get criminally charged for acts which are more appropriately called civil torts in the vein of breaches of contract.  Fortunately, saner heads in the form of New York federal appellate judges have prevailed.

A former Goldman Sachs computer programmer who stole publicly-available computer source code was acquitted by a three-judge federal appellate court in New York Thursday in an unusual move.  The Second Circuit Court of Appeals panel, including my old Yale Law School dean Guido Calabresi, reversed the 2010 conviction of Sergey Aleynikov and ordered a directed judgment of acquittal.  This means Aleynikov cannot be retried, which is an option for prosecutors when a conviction is overturned on legal grounds.

The most comprehensive coverage, with background, of this case has been from white collar crime blogger Walter Pavlo, whose report is here.

This entire prosecution begs one question: Did Goldman Sachs play a role -- never mind a totally inappropriate and scary role -- in getting Aleynikov prosecuted?

I await the opinion -- as do other commentators.  What's interesting is that while briefs were submitted weeks ago in advance of Thursday's oral arguments, the appellate court panel's ruling came down within hours.  This suggests an obvious legal problem -- and one which should have been obvious to federal prosecutors and which further warrants an examination into the decisionmaking process that led to this prosecution even being brought. 

By extension, there is another problem: the mentality of win-at-all-costs in some prosecutors' offices that leads to some cases being indicted, tried and won, even when it is fairly clear that the hapless defendant is actually innocent or that the conduct of which he (or she, in rare cases) was accused is not actually a federal crime. One root cause of this is the current recession -- which in the legal industry is a depression and structural realignment.  The fear of legal career oblivion is surely leading to some prosecutors bringing cases to impress future private employers, with plenty of innocents as acceptable collateral damage.

The background of the Aleynikov prosecution deserves an internal review, if not formal investigation within the Department of Justice.  That department's mandate is to achieve justice, not to advance the narrow political and career objectives of its employees -- or of favored status crony corporations and other special interests. 

Eric Dixon is a New York investigative lawyer with substantial private equity, securities, corporate and election law experience.  Mr. Dixon has been developing a book on crony justice and strategies for developing the mental strength to fight it.

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