Key facts
- The Department of Justice has initiated a criminal investigation into Deel.
- Deel is accused of orchestrating a spying operation against its competitor, Rippling.
- The investigation involves allegations of recruiting an employee to steal confidential information.
- Grand jury subpoenas have been issued by federal prosecutors.
- Court documents suggest a potential payment scheme to conceal funds related to the alleged spying.
The U.S. Department of Justice has launched a criminal investigation into Deel, an AI-powered human resources company, over allegations that it orchestrated a corporate espionage operation against a rival firm, Rippling. Federal prosecutors, led by U.S. Attorney Craig Missakian for the Northern District of California, have issued grand jury subpoenas seeking information about the alleged spying.
The investigation stems from an affidavit filed by Keith O’Brien, an Ireland-based employee of Rippling. O’Brien claims that Deel CEO Alex Bouaziz personally recruited him and instructed him to extract confidential information from Rippling. The affidavit also alleges that other Deel executives, including Bouaziz’s father, who is the company's executive chairman and chief strategy officer, were involved in the scheme.
Court documents unsealed in connection with the case suggest a potential payment scheme designed to obscure the origin of funds. These documents allege that $6,000 was transferred from an entity connected to Deel to the wife of Deel's Chief Operating Officer, Dan Westgarth, and then immediately forwarded to O’Brien.
Deel has publicly denied any wrongdoing, stating that the company is not aware of a criminal investigation but is willing to cooperate with authorities. The company has previously asserted that it looks forward to asserting its counterclaims.
Despite the serious allegations, Deel, valued at approximately $17 billion, has continued to grow. The company recently completed a funding round that increased its valuation to $17.3 billion. Andreessen Horowitz, a prominent venture capital firm, holds a significant stake in Deel, estimated at 20 percent, worth nearly $3.5 billion at the company's latest valuation. Deel has also expressed ambitions for an initial public offering within the next two years.