The Rippling/Deel spy story may have taken another turn

The Ministry of Justice has reportedly opened an investigation into HR and the founders of Deel over allegations that it hired a corporate spy to leak information about its arch-rival, Rippling, reports The Wall Street Journal.

In an email to TechCrunch, Deel says he is “not aware of any investigation. We will always cooperate with the appropriate authorities and provide any necessary information in response to inquiries.”

Deel’s voice is the self-proclaimed Rippling. It points to his lawsuit alleging his opponent has been on a “vicious campaign,” saying he is beating the competition in the marketplace, adding, “the truth will prevail in court.” Rippling declined to comment.

This is the biggest drama between two HR startups.

Repetition, Rippling sued Deel in May, and He renewed the suit in Junesaying that his enemy planted a spy for the company. A Rippling employee was caught in a sting operation and confessed to being a paid spy for Deel in an Irish court via swear words that sound like a Hollywood movie. The employee testified that he took Rippling’s sales processes, product lines, customer account information, names of top employees, everything that was requested, and gave it to Deel management.

Rippling’s lawsuit, which is still ongoing, accused his opponent of violating the federal racketeering statute (known as the RICO statute and used against organized crime) among other laws he cited. But even though he used words like “criminal group,” this was a simple crime, not a crime.

Deel countersuited Rippling, alleging spying by posing as a customer, among other claims.

The spies lived in fear

The man who admitted to spying agreed to testify at Rippling’s trial, and Rippling agreed to pay his legal and travel expenses, according to the man’s plea agreement that was released as a court document and seen by TechCrunch. Deel now calls Rippling’s husband a “paid witness”.

But the man returned to the court saying that his family is there he is living in fear because he trusted the people from Deel he was following him. Deel’s lawyer initially denied this but then he found out that Deel had hired him to supervise.

Pay for a spy

Rippling’s most recent victory, in late November, when it found the bank records. The records show that Deel transferred money to an account owned by the wife of Deel’s COO, and 56 seconds later that account transferred the same money to an account owned by a known spy.

Meanwhile, another court document shows that Deel founder and CEO Alexandre Bouaziz, known as the “mastermind” of the espionage conspiracy in the Rippling case, has hired high-powered attorney William Frentzen to represent him. Frentzen is a partner in Morrison Foerster’s defense practice and previously served as the head of corporate fraud and defense in the US Attorney’s Office for the Northern District of California.

Rippling’s attorney is none other than Alex Spiro of white-shoe law firm Quinn Emanuel. Spiro is a former Manhattan District Attorney’s Office known for his big personality and a long list of high-profile clients, from Elon Musk to Jay-Z.

So it all sounds like a plot straight out of a John Grisham novel, with a sprinkling of the show “Suits” on top.

None of this has stopped investors backing Deel or Rippling. In October, Deel announced it had hit cost of $ 17.3 billion after raising $300 million led by Ribbit Capital and Andreessen Horowitz. Rippling hit a Calculation of $ 16.8 billion in May after raising $450 million from investors such as Elad Gil, Goldman Sachs Alternatives, and Y Combinator.