Ex-Goldman programmer eyes US dismissal;talks go on

* 30-day extension granted

* Programmer accused of stealing code

* Defense lawyer had sought deferred prosecution agreement

NEW YORK, Aug 17 (Reuters) - A federal judge has granted
more time for the government to seek an indictment against or
work out a settlement with a former Goldman Sachs Group Inc
(GS.N) programmer accused of stealing trade secrets, after the
programmer's lawyer said she wants the case dismissed.

U.S. Magistrate Judge James Francis delayed further
proceedings by 30 days until Sept. 16 to let the government and
Sergey Aleynikov, the former programmer, continue talks.

Assistant U.S. Attorney Joseph Facciponti said talks to
resolve the case have gone on from July 7 to as recently as
Aug. 13, and that justice would be served by giving the parties
more time. Talks were previously extended on Aug. 3.

It is common for prosecutors to ask to extend a deadline
for seeking an indictment while plea negotiations are taking
place. The request does not mean a settlement is forthcoming.

Prosecutors have accused Aleynikov of downloading stolen
Goldman proprietary code onto a home computer, a theft that
could cost the Wall Street bank millions of dollars.

Aleynikov has told investigators that Goldman knew he had
worked on the relevant code from home previously without
complaint, and that he had no intent to steal.

The FBI arrested Aleynikov on July 3 at Newark Liberty
International Airport. He was later freed on $750,000 bail
following several days of detention.

At a hearing on Aug. 10, Aleynikov's lawyer said she would
seek to persuade prosecutors to enter a "deferred prosecution"
agreement for her client.

Such agreements let accused persons escape criminal charges
so long as they do not break the law for some period of time.

"I'm looking to show the United States Attorney's Office
that my client never engaged in any improper behavior, was a
well-respected employee, was not fired, was not reprimanded,
nor were there any complaints issued against him," Aleynikov's
lawyer, Sabrina Shroff, said at the Aug. 10 hearing.

A copy of the hearing transcript was reviewed by Reuters.

Shroff did not immediately return a call seeking comment. A
spokeswoman for U.S. Attorney Preet Bharara declined to
comment.

Aleynikov worked at Goldman in New York for two years
before joining Chicago-based Teza Technologies LLC in June.
Teza suspended him following his arrest.

The case is U.S. v. Aleynikov, U.S. District Court,
Southern District of New York (Manhattan), No. 09-mag-01553.
(Reporting by Jonathan Stempel, editing by Matthew Lewis)