McCune Law Group (MLG) has filed a whistleblower lawsuit against TikTok, accusing the social media giant of turning a blind eye to fraud and even possible links to terrorism. The case, filed on October 8, 2024, in Santa Clara County’s Superior Court, alleges that TikTok retaliated against an employee who raised alarms about serious criminal activity on its platform.
The plaintiff, who worked as a Fraud Strategy Expert, claims he was terminated after exposing massive internal issues, including data security lapses, fraudulent transactions, and accounts potentially linked to terrorism. Among the more jaw-dropping allegations? A reported $1 million in fraudulent activity was uncovered, but TikTok allegedly only wanted to pursue cases that directly affected its own bottom line.
According to the lawsuit, the employee’s concerns came to a head in October 2023, when Hamas’ attack on Israel coincided with a surge in suspicious transactions on TikTok. The Fraud Strategy Expert flagged several accounts that seemed connected to Hamas and were possibly fundraising for the organization. However, TikTok’s response? Allegedly more focused on expanding practices that could be exploited than curbing the criminal behavior.
As if that wasn’t bad enough, things took a turn when the employee raised concerns that U.S. users’ private data was being accessed by TikTok’s parent company ByteDance overseas. That’s when the trouble started. Instead of investigating the allegations, TikTok slapped the employee with a mandatory Performance Improvement Plan (PIP)—a move that felt like punishment. A month later, in July 2024, he was fired without warning.
“This case is bigger than just one employee being wrongfully terminated,” said lead attorney Richard McCune. “It raises serious questions about TikTok’s priorities. Were profits more important than user safety? It seems so.”
Co-counsel Gavin Kassel added, “Our client was trying to do his job—reporting fraud and security violations. But instead of fixing the problem, TikTok chose to shoot the messenger.”
The lawsuit provides detailed allegations about the fraudulent activity that TikTok’s Fraud Strategy Expert uncovered soon after joining the company in 2023. According to the complaint, this activity involved large-scale scams exploiting the platform, where up to $1 million in fraudulent transactions were being exchanged. The exact nature of these fraudulent schemes is still unclear, but they were described as affecting not only users but potentially having wider-reaching implications for the platform’s integrity.
Rather than taking strong action to address these fraudulent practices, TikTok allegedly chose to prioritize the cases that could directly impact its own financial interests. In other words, if the fraud didn’t threaten TikTok’s bottom line, it wasn’t worth addressing. This approach, the lawsuit claims, left vulnerabilities wide open on the platform, allowing criminals to continue exploiting users.
In a particularly shocking accusation, the plaintiff identified a practice within the platform that was especially susceptible to criminal exploitation, especially for money laundering and fraudulent schemes. Rather than shutting this down or investigating further, TikTok chose to expand it, despite knowing how easily bad actors could take advantage of it. This decision, as per the lawsuit, raised serious concerns about TikTok’s commitment to fighting fraud and protecting its users.
The situation escalated significantly after the October 7, 2023, Hamas attack on Israel. The plaintiff claims that fraudulent activities surged on TikTok during this time, with accounts that appeared to be fundraising or channeling funds to Hamas-linked entities. Despite this alarming discovery, the employee alleges that TikTok’s internal response was underwhelming at best, ignoring many of the red flags raised by the Fraud Strategy Expert.
Instead of taking decisive action, TikTok allegedly allowed these accounts to continue operating with minimal scrutiny, ignoring the potential danger. This, combined with the earlier decision to expand a vulnerable practice, paints a troubling picture of TikTok’s internal priorities. Rather than prioritizing safety and security, the lawsuit suggests that TikTok’s focus remained squarely on profits and expansion, leaving users exposed to both fraud and potentially even terrorist-related activities.
MLG is urging others who have experienced similar retaliation or have more information to step forward. TikTok, long embroiled in controversy over its data practices, may now face even tougher scrutiny. This lawsuit could be just the tip of the iceberg.
