The Department of Justice has opened a criminal investigation into allegations that HR software company Deel recruited a corporate spy inside rival firm Rippling. According to reports citing unsealed court documents, grand jury subpoenas were issued by the U.S. Attorney for the Northern District of California, signaling that what began as a civil dispute between competitors has escalated into a federal criminal matter.
This case illustrates how corporate espionage—once viewed primarily as a civil issue involving trade secret misappropriation—increasingly attracts criminal prosecution. For executives, employees, and anyone involved in competitive intelligence gathering, the stakes have never been higher.
The Allegations
According to reporting based on court filings, Rippling alleges that Deel cultivated a Rippling employee to steal confidential business information. The alleged spy reportedly searched for “Deel” in Rippling’s systems an average of 23 times and passed internal documents to Deel in exchange for monthly payments.
Unsealed documents detail allegations that funds were routed through personal bank accounts to obscure payments to the former employee. Subsequent payments were allegedly made in cryptocurrency to further hide the trail. The former employee reportedly admitted to passing internal documents to Deel before being caught in a sting operation.
Criminal Statutes at Play
Corporate espionage cases can trigger multiple federal criminal statutes, each carrying substantial penalties:
Economic Espionage Act (18 U.S.C. § 1831-1839): The theft of trade secrets for the benefit of a foreign entity can result in up to 15 years imprisonment. Even domestic trade secret theft (§ 1832) carries penalties of up to 10 years.
Computer Fraud and Abuse Act (18 U.S.C. § 1030): Unauthorized access to computer systems, or exceeding authorized access to obtain information, can result in up to 10 years imprisonment for a first offense and 20 years for subsequent offenses.
Wire Fraud (18 U.S.C. § 1343): Using electronic communications in furtherance of a scheme to defraud carries penalties of up to 20 years imprisonment.
Conspiracy (18 U.S.C. § 371): Agreement to commit any federal offense can add an additional 5 years to any sentence.
For those who orchestrate such schemes, the penalties compound. And cryptocurrency payments, rather than providing anonymity, often create additional evidence that prosecutors can trace.
Who Faces Criminal Exposure?
In corporate espionage investigations, criminal liability can extend well beyond the person who actually obtained the information. Potential targets include:
- The employee or former employee who accessed and transmitted the information
- Executives who directed, authorized, or knew about the espionage
- Managers who supervised or facilitated the scheme
- Anyone who received stolen information knowing its source
- Those who helped conceal the scheme or payments
The theory of conspiracy allows prosecutors to charge anyone who agreed to participate in the scheme, even if they didn’t personally steal information or make payments.
The Blurring Line Between Competitive Intelligence and Crime
Companies routinely gather competitive intelligence. They attend trade shows, hire from competitors, analyze publicly available information, and try to understand their market. All of this is legal.
The line crosses into criminal territory when someone obtains proprietary information through theft, deception, unauthorized computer access, or breach of confidentiality obligations. The Deel-Rippling matter allegedly involves crossing that line—recruiting an insider to steal and transmit confidential information in exchange for payment.
For employees considering such arrangements, the criminal exposure is direct and substantial. For executives who encourage or direct such activities, the exposure may be even greater. As I have seen in complex federal criminal cases, prosecutors often seek to hold leaders accountable for schemes they authorized or should have prevented.
Protecting Yourself
If you have been contacted by investigators, received a grand jury subpoena, or believe you may have exposure in a corporate espionage investigation, contact an experienced federal criminal defense attorney immediately.
Do not speak with investigators without counsel present. Do not discuss the matter with colleagues or anyone who might become a witness. Do not destroy any documents or communications. And understand that your employer’s interests may not align with yours—particularly if the company is seeking to cooperate with prosecutors.
At The Chetson Firm, Damon Chetson brings extensive federal trial experience to corporate espionage and trade secret cases. As a Board Certified Specialist in Federal Criminal Law with more than 25 jury trials, he provides the aggressive, knowledgeable defense that these high-stakes matters require.