United States v. Agrawal
2013 U.S. App. LEXIS 15820
| 2d Cir. | 2013Background
- Agrawal, a SocGen trader, printed thousands of pages of proprietary high‑frequency‑trading (HFT) computer code and transported the printouts from SocGen’s New York office to his New Jersey home, then shared details with a prospective employer (Tower) who sought to hire him to replicate SocGen’s systems.
- SocGen’s ADP and DQS systems generated substantial revenue and were treated as secret; Agrawal had signed confidentiality obligations forbidding disclosure and return of materials at termination.
- Agrawal resigned after negotiating employment with Tower; FBI seized the paper printouts at his home the day he was to start at Tower. He admitted printing and removing the code without authorization.
- Indicted on two counts: (1) Economic Espionage Act (EEA), 18 U.S.C. § 1832 (trade‑secret theft tied to a product in interstate commerce); (2) National Stolen Property Act (NSPA), 18 U.S.C. § 2314 (transport of stolen goods ≥ $5,000 in interstate commerce).
- At trial Agrawal testified but admitted copying, transporting, and sharing proprietary code; jury convicted on both counts; district court sentenced him to concurrent 36‑month terms.
- On appeal Agrawal challenged legal sufficiency under Aleynikov, evidentiary sufficiency as to NSPA, jury instructions, and alleged constructive amendment/variance. The Second Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legal sufficiency of EEA jurisdictional element | Government: the stolen trade secret relates to a product placed in interstate commerce (securities traded using the code) | Agrawal: under Aleynikov the code was only part of an internal HFT system, and an internal system cannot be the ‘‘product produced for or placed in interstate commerce’’ required by §1832 | Affirmed: Securities traded via the HFT system satisfy the statute’s product/nexus requirements; prosecution relied on that theory rather than treating the internal system itself as the product |
| Legal sufficiency of NSPA ("goods, wares, merchandise") | Government: the paper printouts are tangible goods transported in interstate commerce | Agrawal: code is intangible intellectual property and thus not "goods" under §2314 (relying on Aleynikov) | Affirmed: Aleynikov turned on intangible electronic transfer; here code existed in tangible paper form when removed and transported, satisfying NSPA |
| Sufficiency of evidence for market/value under NSPA | Government: evidence (Tower’s offer, market for trading systems) shows a market and value ≥ $5,000 | Agrawal: insufficient proof of a market for the code or $5,000 value | Affirmed: reasonable juror could find a market (Tower’s hiring and profit‑sharing offer) and value threshold met |
| Constructive amendment / variance and jury instruction challenges | Agrawal: indictment’s “to‑wit” language limited theory to intent at the time of removal and to specified means; charging/argument expanded elements (possession, timing, product) in ways violating indictment/Yates | Government: indictment listed many statutory means and alleged an extended course of misconduct; jury was instructed that EEA intent could be formed at removal or at any time while in unauthorized possession; prosecution relied on securities as product | Affirmed: no constructive amendment or prejudicial variance — indictment put defendant on notice of the core criminality; any unpreserved charge objections reviewed for plain error and failed given overwhelming evidence |
Key Cases Cited
- United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012) (construing EEA product/nexus language and holding electronic‑only theft of code did not satisfy NSPA goods requirement)
- Dowling v. United States, 473 U.S. 207 (Sup. Ct. 1985) (NSPA requires physical identity between items obtained and those transported; intangible‑only infringements do not trigger §2314)
- United States v. Bottone, 365 F.2d 389 (2d Cir. 1966) (papers describing manufacturing procedures constitute goods under NSPA)
- Jackson v. Virginia, 443 U.S. 307 (Sup. Ct. 1979) (standard for sufficiency of the evidence review—any rational trier of fact could have found guilt beyond reasonable doubt)
- United States v. D'Amelio, 683 F.3d 412 (2d Cir. 2012) (distinguishing constructive amendment from non‑prejudicial variance; core of criminality concept)