The commercial espionage laws might justify bringing it into a criminal case, although (and I'm only on page 7 here) it doesn't seem like they proved, or even attempted to, that the removal of the code was in the interest of using it in his new endeavor. From the sounds of it he was primarily interested in bringing out some modified libraries. So while incidentally bringing out the proprietary code might well qualify him for the civil case, the commercial espionage accusation seems pretty damned weak, especially since the laws are designed to protect trade secrets (the formula for new coke anyone?) as opposed to this blatantly more mundane potential piece of IP. Also depending on the licenses of the open source stuff (as hinted at in a prior comment), it may not have been within the guy's legal authority to hand over IP rights to GS for some of the code.