Kovin was doing something illegal that involved drugs or toxins.
Seven's false memories are just that; Kovin never assaulted her, and the other people on her "flashback" never existed. However, her mind was subtly affected by an illegal substance that Kovin was harboring in his lair. He thought he'd hid it well, but it had an effect on her human and/or Borg physiology, when she inhaled its odorless fumes, or touched some contaminated object. This is why Kovin was acting so suspicious despite being innocent of the alleged assault, and panicked enough to commit suicide. He wasn't afraid that they wouldn't believe his innocence of the current accusation, he was afraid that as they kept digging his real crime would be exposed.- A related possibility: the gun misfire was a genuine accident, but while Kovin was treating Seven afterward, he decided to take the opportunity to gather some of the regenerating nanoprobes which had been left on the gun/countertop so as to repurpose them for his weapons technology. He then did alter her memories (since she genuinely had no memory of the missing two hours), both to hide that he had done this and to keep from revealing the error with the gun, since this would likely have affected Janeway's willingness to purchase it from him. So he didn't assault her or take the nanoprobes from her directly, but he did alter her memories, he did intend to use the nanoprobes illegally, and it was the guilt of this he was hiding.
