An Investigation by Frontiers of Freedom
Last week, Silicon Valley fintech darling Deel, who counts Marc Andreesen and Lauren Powell Jobs as investors, announced a plans for an IPO in 2026 and a valuation of over $12 billion.
This is amazing, and reaffirms the dominance of U.S. Big Tech.
But is everything as it seems?
In a Florida courtroom a few weeks ago, Deel was hit with accusations of violating Russian sanctions in a Racketeer Influenced and Corrupt Organization (RICO) case filed in U.S. District Court.
The case was brought by a court-appointed receiver, Melanie Damian, under the purview of the U.S. Securities and Exchange Commission (SEC), where Damian alleges:
- Deel transmitted monies through a Florida subsidiary, DPayments, without a money transmitter license, and in violation of federal Anti-Money Laundering (AML) and Know Your Customer (KYC) rules required under the Bank Secrecy Act (BSA). Damian seeks recovery and disgorgement of more than $2.2 million.
- Deel hired employees from a Puerto Rico-based digital bank co-founded by Russian nationals that failed its examination under Puerto Rico’s banking regulator.
- Deel has a partnership with a sanctioned-Russian bank based in Moscow and points to violations of Russian sanctions.
These accusations are serious in nature and could undermine efforts by President Trump to bring a resolution to the Russia-Ukraine War. The Trump administration has stated the possibility of additional sanctions against Russia as an important tool of pressure to get President Vladimir Putin to the negotiating table.
Frontiers of Freedom’s investigation of open-source materials highlights a troubling pattern of possible violations of both the spirit and letter of the law by Deel and various subsidiaries and partners, not just in the U.S., but also the U.K. and European Union. We detail them below.
Sadly, it appears these violations were simply ignored by the Department of Justice and Office of Financial Assets Control (OFAC) under the Biden administration.
In our report, we urge the Trump administration to act with urgency, take decisive action if the evidence is confirmed and close the loopholes, we identify that allow this and punish those who have collaborated with Russia to keep the war going.
Who Is Deel?
Deel was co-founded in 2019 as a Silicon Valley “unicorn” by Alex Bouaziz and Shuo Wang as part of the intensely hyped “HR outsourcing industry.”
Together, they founded Deel as a company that “takes the hassle out” of complying with employment and business rules, acting as an “employer of record” for their clients in foreign countries handling payroll, taxes, benefits and other legal requirements.
Deel has been accused by multiple U.S. legislators of misclassifying workers as independent contractors in violation of federal and state labor laws.
Despite these accusation, Deel’s list of investors and clients is impressive from Nike and Subway to Emerson Collective and General Catalyst, and have wrapped themselves around high-profile political figures like former U.S. Secretary of Labor, Elaine Chao.
Recently, Deel announced the sale of $300 million in secondary shares to General Catalyst and “an unnamed sovereign investor” rumored to be Abu Dhabi’s sovereign wealth fund. Bouaziz claimed it was to prepare for an IPO “potentially next year or a bit later.”
Alex Bouaziz
- Listed as an independent contractor of Deel citing his constant movement as reasoning why he can’t pinpoint “from a tax perspective” his domicile.
- His father, Phillipe Bouaziz, serves as Deel’s CFO.
Shuo Wang
- Named the 39th richest self-made woman in America in 2024.
Clients, Investors and Advisors
- Clients: Nike, Shopify, Reebok, and Subway.
- Investors: Andreesen Horowitz (a16z), Emerson Collective, and General Catalyst.
- Advisory Board: Former U.S. Secretary of Labor, Elaine Chao; Former U.S. Senator Heidi Heitkamp, and Former U.S. Deputy Secretary of Labor Seth Harris.
These facts highlight how Deel’s financial network is an alleged map of how the company is partnering with Russians to move its unsuspecting clients’ money around the world.
From Miami to San Juan with Love & Cash
The case against Deel also highlighted the company’s deep footprint in Puerto Rico – a known haven for money laundering and illicit banking activity. The trail that goes through Puerto Rico features more of how Deel is deeply enmeshed in Russian connections.
This Russian venture in Puerto Rico seems to fit the bill for the U.S. territory’s fame as a haven for illicit banking, as mentioned in the FinCEN director’s remarks early last year.
Damien finds that DPayments had made money transfers without the proper licenses. She then found that its local sole operator, Jeremy Berger, was also the co-founder of Arival Bank, a “digital bank” in Puerto Rico serving “abnormal” – a code word for high-risk and sketchy — banking clients.
Berger’s co-founders are two Russian nationals: Vladislav Solodkiy and Igor Pesin. Solodkiy owns Life.Sreda, a Russian venture capital fund investing in U.S.-based fintech startups. Interestingly, Berger worked at Life.Sreda before co-founding Arival and then moving with Pesin to Deel.
Arival failed the Puerto Rico’s banking regulatory examination and was found by the Puerto Rican Office of the Commissioner of Financial Institutions (OFIC) to pose ‘serious damage or imminent danger’ to the banking system and the public.
At the time of its failed inspection, Arival’s Global Head of Compliance and Governance was Anastasia Cavallini, who the RICO complaint says was trained in Russia. Cavallini is now Deel’s head of anti-money laundering compliance.
OCIF’s main job is to monitor Puerto Rico’s financial institutions and stop any illegal activity, however they provide little to no real oversight. This is illustrated by the fact that Arival continues to operate.
The Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and the Department of Justice have failed to stop this alleged illicit activity within Puerto Rico’s banking system, but the abuses continue to take place.
To Russia with More Love & Cash
Based on the evidence revealed in the lawsuit – the alleged partnership with the sanctioned Russian bank, the ties to Russian oligarchs, and movement on
money through entities tied to Russia – there’s questions surrounding the nature of Deel’s relationships.
As of now, there is no U.S. regulatory body or agency that is actively tracking tech companies like Deel’s business dealings or financial transactions. The lawsuit pulls out the evidence of Deel’s relationship with Russia, but there is no way to know the breadth of its global financial network and how many more connections to sanctioned Russian individuals and entities they might be trying to conceal.
Investors in Deel should particularly be demanding public explanations from the company about its relationship with T-Bank, its Russian subsidiary Letsdeel, and its ties to Russians throughout its financial payments network. It is notable that Deel closed a massive investment round in 2022, the same year that the war started in Ukraine, and was valued at $12 billion by the end of it due to a sudden and huge increase in revenues.
Trump Administration Must Investigate
The news of the RICO case has spread. But the fact that its co-founders, its spokespersons and its court filings have not answered the evidence of sanctions-busting is alarming. Instead, Deel’s response to the RICO case has been entirely procedural, seeking to immediately dismiss the case and block any judicial scrutiny of the evidence.
United States Attorney General Pam Bondi, the DOJ and OFAC are tasked with protecting the U.S. from illicit activity such as this, and we urge them to investigate and ensure the U.S. financial system is not being abused or used as a haven for money laundering.