I don't know if he was a mod, per se. The scandal was that he received renumeration from Reddit, and had a direct reporting relationship with them. It probably wasn't much, and was probably loose enough to allow a speedy under-bus transition of the person, when found out.
I am not much of a Reddit user, so I don't know the landscape well enough to be cognizant of the terminology.
You're getting it mixed up. He was running a bunch of shock porn and near-porn subreddits skirting really close to the line of illegality(most notoriously a number devoted to clothed but suggestive pictures of minors). Nobody was paying him. This was the piece you're thinking of: https://gawker.com/5950981/unmasking-reddits-violentacrez-th...
Yes, that's probably it, and it does look like I was mistaken. The problem was that Reddit wasn't doing anything about it. People got quite upset over that.
Thanks for the correction. I [honestly] appreciate it.
I suspect this was what had me confused:
> Violentacrez's privileged position came from the fact that for years he had helped administrators deal with the massive seedy side of Reddit, acting almost as an unpaid staff member. Reddit administrators essentially handed off the oversight of the site's NSFW side to Violentacrez, according to former Reddit lead programer Chris Slowe (a.k.a. Keysersosa), who worked at Reddit from 2005 to the end of 2010. When Violentacrez first joined the site and started filling it with filth, administrators were wary and they often clashed. But eventually administrators and Violentacrez came to an uneasy truce, according to Slowe. For all his unpleasantness, they realized that Violentacrez was an excellent community moderator and could be counted on to keep the administrators abreast of any illegal content he came across.
And this might be why I didn't remember the case. So it's either a different one the GP is talking about -of which I couldn't find any relevant result, maybe my fault- or the GP is referring, like you suggest, to Violentacrez, a very different case that I still remember.
I am not much of a Reddit user, so I don't know the landscape well enough to be cognizant of the terminology.