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.

It’s just one episode in what more than a dozen former employees describe as a series of operational mishaps at Mercor, a fast-growing startup that has recruited 50,000 highly-skilled experts—PhDs, lawyers, bankers, scientists and programmers—to create training data for big AI labs like OpenAI. It’s been hugely successful so far: In September 2025, Mercor’s annualized revenue run rate crossed $1 billion, or $83.3 million in monthly revenue, according to a person familiar with the company.

Founded in 2023 by three longtime friends who met on the high school debate team, Mercor has become a poster child for booming Silicon Valley AI startups run by unusually young, unusually wealthy founders. The three cofounders — Foody, CTO Adarsh Hiremath, and board chairman Surya Midha — were 22 years old when they became the world’s youngest self-made billionaires in October, after raising $350 million from storied VCs like Felicis, Benchmark and General Catalyst at a $10 billion valuation, Forbes reported.

Mercor employees suspected that North Korean operatives had worked for the company by using stolen credentials to skirt identity checks, multiple sources told Forbes.

Mercor employees suspected that North Korean operatives had worked for the company by using stolen credentials to skirt identity checks, multiple sources told Forbes.

Beyond the fraud incident, Mercor has suffered from a number of security problems in recent months, according to interviews with five former staffers. One example: As early as November 2024, and continuing until recently, Mercor........

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