A retired Croatian underwear seamstress, who allowed her nephew, a former Goldman Sachs analyst, to make illegal insider trades through her brokerage account, has won the reversal of a $5.7 million penalty she owed to the Securities and Exchange Commission because she sent her response to the allegations to the wrong address.

Back in 2005, the seamstress, Sonja Anticevic, was implicated in an insider trading ring that involved two Goldman employees, a New Jersey mailman, a former Merrill Lynch analyst and a printing plant worker in Wisconsin.

At the time, prosecutors accused the Goldman employees, David Pajcin and Eugene Plotkin, (also a professional ballroom dancer) of trading trading stocks based on, among other things, prepublication copies of BusinessWeek magazine's "Inside Wall Street" column and information leaked from a grand-jury probe involving Bristol-Myers Squibb.

Most of the others implicated in the scheme have pled guilty and are serving jail time. Pajcin, Anticevic’s nephew, pleaded guilty and agreed to cooperate with prosecutors but has apparently fled the country. In November, the SEC levied a $5.7 million penalty on Anticevic for helping her nephew hide his trades and for ignoring the SEC’s charges by failing to show up in court.

Anticevic later hired a Croatian lawyer, who said his client responded to the court in an Aug. 31, 2009 letter but sent it to the wrong address.

That mistake was apparently enough to get the judge overseeing the case to reverse the penalty. On late Friday, U.S. District Judge Kimba Wood threw out the default judgement against Anticevic citing her status as a foreigner who is “likely not familiar with the U.S. legal system and court procedures.”

The judge also noted that Anticevic, believed to be in her late-60s, "did not know and had no reason to know" that her nephew was engaging in illegal trading through her brokerage accounts. The judge directed the former seamstress to answer the SEC's complaint electronically by July 21.

Plotkin pleaded guilty in 2007 and was sentenced to 57 months in prison. Pajcin was sentenced to "time served" in January 2008 and ordered to forfeit $6.7 million in illicit profits.

Jason Smith, the grand juror in the case against Bristol, was sentenced to 33 months in prison, and Stanislav Shpigelman, a former Merrill Lynch analyst who leaked confidential info about pending mergers to the Goldman guys, received a sentence of 37 months in prison in 2007.