According to documents reviewed by The Wall Street Journal and information from individuals familiar with the matter, the U.S. Department of Justice has initiated a criminal investigation into allegations that the HR tech company Deel planted spies within a competitor.

Documents reveal that Craig Missakian, the U.S. Attorney for the Northern District of California, issued grand jury subpoenas in recent weeks, demanding a wide range of information related to Deel's suspected espionage activities targeting its competitor, Rippling.

In an affidavit filed this past April, Keith O'Brien, an Ireland-based employee of Rippling, accused Deel's CEO, Alex Bouaziz, of recruiting him and instructing him to steal specific information from Rippling. O'Brien further claimed that this espionage plot involved several Deel executives, including Bouaziz's father—the company's Executive Chairman and Chief Strategy Officer.

A spokesperson for Deel stated that the company is currently unaware of any criminal investigation but is prepared to cooperate with relevant authorities. The company has previously asserted publicly: "We deny any and all allegations of wrongdoing and look forward to filing counterclaims."

Publicly available court documents show that an entity linked to Deel transferred $6,000 to an account belonging to the wife of the company's Chief Operating Officer, Dan Westgarth. This sum was then transferred from that account to Keith O'Brien within seconds.

Alex Bouaziz, his father, and Dan Westgarth did not respond to requests for comment. Keith O'Brien's legal representative also declined to comment.

Deel's core business involves providing human resources solutions for companies looking to expand overseas, specifically handling paperwork, legal, and administrative management for locally hired employees in new markets.

Despite the public espionage allegations, Deel successfully completed a funding round last October, which saw its valuation increase from a previous $12 billion to $17.3 billion. This figure indicates that Deel's business has continued to scale even while facing these serious accusations.

Deel is one of the standout companies in the investment portfolio of venture capital giant Andreessen Horowitz. Court filings show that as of this summer, the VC firm held a 20% stake in Deel. Based on Deel's latest valuation, this stake is worth nearly $3.5 billion. Deel has indicated that it plans to initiate an initial public offering (IPO) within the current or next year.

A spokesperson for Andreessen Horowitz did not respond to a request for comment.