Mercor’s 23-Year-Old Billionaire Founders Grapple With Employee Fraud And North Korean Infiltration

During an all-hands meeting earlier this year at data labeling startup Mercor, its then 22-year-old billionaire CEO Brendan Foody pulled up a slide with a single word: fraud. An employee had embezzled company funds, he told his staff of more than 200. The person had since been fired. There would be no tolerance for this behavior, Foody said, according to four people familiar with the meeting. Foody didn’t identify the employee or disclose the amount stolen at the meeting. But Forbes has learned that the culprit was an early hire and lead manager on the Anthropic account, one of the company’s most important, where Mercor’s contractors create training data to help build Claude. Multiple former Mercor employees said the manager had recruited his brother and father as “experts” and sent them hundreds of thousands of dollars in so-called bonus payments. He was reported in late December after it was discovered that contractors were paid more than the amount billed to Anthropic for multiple data generation projects, two sources said. Anthropic was not aware of the incident, they added. Mercor eventually recovered the fraudulent bonus payments and it did not end up costing customers any money, Mercor spokesperson Heidi Hagberg told Forbes. The former Anthropic account lead, whom Forbes is not identifying, declined to comment for this story. Anthropic declined to comment. By Rashi Shrivastava, Writer Anna Tong, Forbes Staff. Learn more about your ad choices. Visit megaphone.fm/adchoices