Florida Judge Dismisses Deel’s Racketeering Allegations in Lawsuit Over US Sanctions Evasion, but Californian Case Still Looms

A Florida court has dismissed a lawsuit against HR and payroll provider Deel, providing a reprieve for the embattled company. The dismissal, however, is not related to the high-profile lawsuit filed by a rival firm earlier this year involving allegations of corporate espionage.

In a Twitter post, Rippling CEO Parker Conrad clarified that his company was neither party to the dismissed lawsuit nor had it provided any funding for it. No further comment was forthcoming from Rippling representatives.

The dismissed lawsuit, filed in January by Melanie Damian, accused Deel of assisting Russian entities in bypassing U.S. sanctions by processing payments for Surge Capital Ventures. The company was previously embroiled in a separate U.S. SEC action alleging involvement in a Ponzi scheme that defrauded church members out of $35 million. Damian, appointed as the court-appointed receiver for Surge, filed the lawsuit on behalf of investors, claiming that Deel was responsible for processing the payments.

Deel seeks to link this case with the lawsuit filed by Rippling due to Damian’s lawyers citing the Racketeer Influenced and Corrupt Organizations Act (RICO). Rippling, in a separate lawsuit in California, also alleges that Deel violated RICO, as well as the Defend Trade Secrets Act, and California state law, as previously reported.

The California lawsuit against Deel involves different sets of allegations centered on a Rippling employee who testified in an Irish court that he had been acting as a paid corporate spy for Deel.

Deeming the Florida court’s ruling as an invitation for further questions about the credibility of RICO accusations by Rippling, a Deel spokesperson said that they are hoping another court will follow suit. The two cases involve different actions and circumstances, and it remains to be seen how the California court responds.

In addition to the ongoing legal battles, Keith O’Brien, who confessed to being Deel’s alleged corporate spy, secured a restraining order against individuals he claimed were harassing his family. O’Brien now serves as Rippling’s star witness in its case against Deel.

Initially, lawyers for Deel denied involvement, but later admitted the company had hired “discreet surveillance” of O’Brien, according to court testimony seen  and first reported by the Irish Independent.

In a tweet, Rippling CEO Parker Conrad stated, “Alex and his father can deflect and delay but they will face the music when we get our day in court,” referring to the case that names Deel’s founder and CEO Alex Bouaziz and his father, who is chairman and CFO, Philippe Bouaziz.

In a statement, a Deel spokesperson said, “Deel will explore all its options for relief, defend itself vigorously against pending cases, and continue to focus on winning in the marketplace.”