Entire Internet: "Fraud? What fraud?"
Journalist: "I can't tell you."
EI: "Oh, so you were IN ON IT!!!111"
J: No, no, I . . .
EI: "A WITCH! BURN HIM!"
The golden line is "XXXX fabricated a story in order to raise funds for a life-saving operation they claimed was necessary. This claim was fraudulent, no operation is necessary, and the fundraiser in question has been removed."
I don't even know if anyone would ask WHY they took the money because no one really ever asks that in cases of fraud like this - because everyone can think of a thousand reasons they could use 20 grand. But if they do, all you have to say is "I'm not at liberty to say - there's confidential information involved which may harm parties not involved in the fraud if released" or "I can't comment on what the money was for, only that the medical reasons stated where not in the least bit true", or a variety of other simple statements that are used all the freaking time.
The only thing that Destructoid really had to withhold was that it was for a sex change operation. "Fraudulent activity in which a fundraiser was set up under false pretenses when in reality, the person who set it up planned on keeping the money for personal gain". Bam. That's it. That's all that had to be said.
I don't know what the threat was exactly, but I can't blame Destructoid for not going through with running the story - the damage had been mitigated as the fundraiser was taken down and they were dealing with somoene making threats of suicide. They did, however, probably drop the ball by not saying anything.
This guy, however, started a shitstorm by going on his (company branded) twitter account, going against his editors orders and released the information anyways. Fair enough if you're uncovering Watergate, but not really in this case. Why? Because his editor knows his job and knows that outing a suicidal transsexual is probably more trouble than it's worth. Especially since LGBT groups are pretty well organized and really really against outting people without their consent. Don't get me wrong, I do know why he did it and it wasn't malicious, but the timing was off (there was no chance of further fraud at this point) and he went about it in the wrong way.
So, looking at it from the editor's perspective, this guy just caused you a headache, a vocal group wants him fired, and he deliberately disobeyed your policy. Not worth the trouble = fired.
It is unfortunate, because it could have probably been pretty easily avoidable if he had acted slightly differently or just realized that he was walking on eggshells. I don't think he grasped the sensitive nature of what he was dealing with and ended up losing his job because of it. He didn't do anything unethical, but doesn't really have a leg to stand on regardless.