A former TikTok employee has accused the social media company of firing him for alerting the company of fraud, some of which was related to the Palestinian terrorist group Hamas.
Dirk Lennarz filed suit for wrongful termination and whistleblower retaliation Oct. 7 in Santa Clara Superior Court, with representation from Ontario’s McCune Law Group.
“This case exposes a concerning pattern of behavior at TikTok, from the appearance of their actions, it seems that profits were placed above stopping fraud and other criminal activity on its platform,” said attorney Richard McCune, according to a press release.
Lennarz was hired as a fraud strategy expert on May 1, 2023, according to the complaint.
After Hamas attacked Israel on Oct. 7, 2023, Lennarz claims to have discovered a spike in fraudulent activity on TikTok. One account appeared to have been fraudulently collecting money to support Hamas or other terrorist activities, the complaint said. Lennarz reported the account to TikTok’s anti-money-laundering team. He continued finding other accounts involved in fraud to support Hamas, and reported them throughout October and November of 2023, his complaint claims.
In November 2023, Lennarz claims to have reported a Hamas-linked account that was allowed to bypass TikTok’s fraud controls. His supervisors decided to leave the account with its special privileges, then decided to expand the list of accounts allowed to bypass fraud control, Lennarz claims.
In February, a major fraud attack resulted in losses totaling $2 million, Lennarz claimed. In June, the FBI subpoenaed Lennarz for information about the October fraud attack.
His supervisors then removed Lennarz from the leadership of collaboration with TikTok’s anti-money-laundering team.
In July, Lennarz told the fraud team that TikTok was storing unencrypted credit card account numbers in violation of the Payment Card Industry Data Security Standard. He also told the team that too many people, including him, had access to these numbers.
On July 8, his supervisor placed Lennarz on a performance improvement plan. He was fired on July 29.
“The reason that (TikTok) retaliated against Plaintiff when he was only doing his job in identifying and then notifying his employer about fraudulent or illegal activity, was that (TikTok) were either profiting from the activity and did not want to lose it as a profit center, or were interested in concealing the activity to avoid government scrutiny into its practices of who it was doing business with and the type of business they were doing on (TikTok),” Lennarz’ complaint says.
McCune, Michele Vercoski, Gavin Kassel and Yasmin Younessi are listed on the complaint. Kassel is the lead employment attorney.
“As the lawsuit alleges, our client was retaliated against for simply doing his job—raising red flags about fraudulent activities and security violations that the company chose to ignore. We intend to hold TikTok accountable for its unlawful practices,” Kassel said, according to a press release.
TikTok has not yet been served with the complaint.
Case No. 24CV448968
Read the complaint here.
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