The US-based company filed a motion to dismiss the Racketeer Influenced and Corrupt Organisations Act (RICO) complaint brought against it by a trustee for fraud victims.
On January 3rd, the company was met with a civil lawsuit brought in Miami by a trustee representing the victims of a Ponzi scheme perpetuated by Brent Seaman and his firm, Surge Capital.
In 2023, the Securities and Exchange Commission (SEC) found that Seaman engaged in a USD 35 million investment fraud against elderly members of a church in Naples, Florida.
According to the suit, Deel processed payments on behalf of Surge, and in doing so, failed to comply with federal AML and KYC laws. These laws hold financial institutions and payment processors responsible for ensuring their services are not used to commit a crime.
The complaint further alleges that Deel processed payments to Russian individuals and companies, in violation of sanctions imposed on Russia by the US after the invasion of Ukraine.
Deel was never directly accused of wrongdoing by the SEC, and its motion to dismiss describes the suit as inaccurate. The company says that while it did process payments for Surge Capital, it was not involved with any criminal wrongdoing, and the case should be dismissed.
It also claims that one of its competitors, the HR software company Rippling, is the driving force behind the allegations. According to a statement Deel sent to media outlets, the lawyer who filed the suit is invested in Deel’s competitor.
Deel, which is valued at USD 12 billion and generates more than USD 500 million in annual revenue, may also have been viewed as a deep-pocketed target as the trustee attempts to take back money on behalf of Ponzi scheme victims.
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