IP Law Daily, TRADE SECRETS—4th Cir.: Criminal trade secrets misappropriation claims against former Deloitte employees revived, (Mar 3, 2026)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The district court erroneously found the length of the US government’s investigation into claims that former employees stole trade secrets constituted a due process violation.

The U.S Court of Appeals for the Fourth Circuit revived the trade secret claims against former Deloitte employees ruling that a district court improperly struck 10 counts of trade secrets misappropriation. The appellate court held that the district court erred in concluding that it would violate the Due Process Clause to prosecute the former Deloitte employees after the Government’s preindictment delay, which was the result of its lengthy investigation and not tainted by bad faith (U.S. v. Minkkinen, No. 23-4443 (4th Cir. Feb. 26, 2026)).

Background. David Minkkinen and Sivaraman Sambasivam (defendants) both worked for Deloitte between 2009 and 2013, then began working for Sagitec Solutions, LLC. At both companies, they had senior roles in the unemployment insurance practice. Both defendants worked for BearingPoint/KPMG in similar roles before Deloitte purchased the company's assets in 2009. They were involved in a project to develop software for an unemployment insurance system for Minnesota between 2003 and 2008. A similar project with Massachusetts began in 2007, was adopted by Deloitte when it purchased BearingPoint, and was completed in 2014. Deloitte entered into a similar contract with New Mexico in 2010. In addition to the defendants, other Deloitte employees who worked in the unemployment insurance practice left the company for Sagitec. Bernt Peterson had previously worked on the Minnesota project as a Minnesota state employee. He then worked on the New Mexico unemployment project for Deloitte. He joined Sagitec in 2014. He died on December 13, 2020. Philip Tackett was another Deloitte employee whose name the investigators identified in the metadata of Consortium documents that they suspected were taken from Deloitte. He began working for Sagitec in May 2019. He died in March 2020.

Later, Sagitec won a bid to design, develop, and implement a federally funded unemployment insurance claims software system for Maryland and West Virginia (Consortium project). Starting in 2016, multiple West Virginia state employees began “noticing suspicious references to Massachusetts, New Mexico, and Deloitte” in Sagitec’s project materials. One employee reported the suspicious references to West Virginia’s Commission on Special Investigations, alleging possible wrongdoing by Sagitec, to include the misappropriation of Deloitte intellectual property. On February 3, 2017, the United States formally opened an investigation. Peterson was identified by investigators in August 2017 as a source of design documents from Deloitte’s New Mexico and Massachusetts projects that Sagitec possessed in connection with the Consortium project.

The defendants were indicted on August 23, 2022, and were charged with misappropriating trade secrets and conspiring to misappropriate trade. The defendants moved to dismiss the indictment arguing that the Government’s preindictment delay prejudiced their defense because the delay resulted in the unavailability of key testimony from Peterson and Tackett, as well as material documents from state agencies. The Government opposed the motion. Before the district court ruled, the Government filed a superseding indictment, dropping the count for substantive trade secret theft and adding several wire fraud counts. The superseding indictment charged both defendants with conspiracy to misappropriate trade secrets in violation of 18 U.S.C. § 1832(a)(5); conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1343 1349; and several counts of aiding and abetting wire fraud in violation of 18 U.S.C. §§ 2, 1343. Minkkinen was also charged with seven counts of making false statements in violation of 18 U.S.C. § 1001, and Sambasivam was charged with two. The district court found that the Government’s “prolonged investigation” was the reason for the delay and the Government’s justification for the length of the investigation was insufficient in light of the extent of the prejudice caused by the delay. Therefore, the district court concluded that prosecution on the affected counts would violate the Due Process Clause and dismissed 10 of the 14 counts charged in the superseding indictment. The Government timely appealed.

Unconstitutional preindictment delay. In the Fourth Circuit, claims of unconstitutional preindictment delay are evaluated under a two-pronged inquiry. The first prong requires a defendant to prove “actual substantial prejudice.” But actual substantial prejudice is not sufficient; the court must consider the reasons for the delay as well to determine whether prosecution after such delay violates “fundamental conceptions of justice or the community’s sense of fair play and decency.” The district court had reasoned that the Government’s investigation could not justify the delay because the actual prejudice is substantial. The Fourth Circuit found that conclusion stands in tension with the “two-pronged inquiry” for evaluating preindictment delay.

Here, the Fourth Circuit only need to address the second prong of the analysis to resolve this appeal. On the first prong, the defendants claim prejudice from the loss of two kinds of evidence: (1) Peterson’s and Tackett’s testimony, and (2) the state agency documents allegedly relevant to past Deloitte projects. The Fourth Circuit noted that even if it accepts for the sake of argument that the district court’s finding that the loss of the evidence actually and substantially prejudiced the defendants’ defense, the district court still erred in concluding that the Government’s action in prosecuting the defendants violated the Due Process Clause.

At the second prong of the preindictment delay analysis, the Fourth Circuit considers whether, balancing the defendants’ prejudice against the Government’s justification for the delay, the Government’s action in prosecuting after such delay violates fundamental conceptions of justice or the community’s sense of fair play and decency. The district court found, and the defendants did not dispute, that the Government’s delay was the product of a “prolonged investigation” untainted by any “improper motive.” By contrast, the Due Process Clause requires the dismissal of an indictment if the defendant can prove that the Government’s prejudicial delay in bringing the indictment was a deliberate device to gain an advantage over him. The Fourth Circuit noted that the Supreme Court has explained that investigative delay is fundamentally unlike delay undertaken for tactical advantage or other reasons, because investigative delay is not so one-sided.

The Fourth Circuit found that the district court’s timeline showed that no portion of the preindictment delay was left unaccounted for by the Government’s good faith investigative efforts. Further, the district court’s own factual findings establish a timeline showing that the Government’s good faith investigative efforts continued until at least one month before the indictment was returned. Even assuming that the defendants have proven actual substantial prejudice to their defense, requiring them to stand trial after the Government delayed indictment to investigate further does not violate “fundamental conceptions of justice or the community’s sense of fair play and decency.” Thus, the preindictment delay here, though lengthy, is entirely attributable to the Government’s good faith investigation, and the district court erred in concluding that the Government’s investigative preindictment delay violated the Due Process Clause.

According, the district court’s order was reversed and the matter was remanded for further proceedings on all 14 counts.

The Case is No. 23-4443.

Judge: Rushing, A.

Attorneys: Jennifer Rada Herrald, Office of the United States Attorney, for the U.S. Michael Edward Nogay (Sellitti, Nogay & Nogay, PLLC) for David Gerald Minkkinen.

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