HR manager creates 22 fake employees, logs perfect attendance for over 8 years to steal ₹18 crore

A human resources manager in China orchestrated an elaborate fraud, creating 22 fake employees and siphoning off ₹18 crore in salaries.

A human resources manager in China was caught running an elaborate embezzlement scheme, creating 22 fake employees to steal 16 million yuan ( ₹18 crore) in salaries and severance payments. The accused, identified by his surname Yang, worked at a labour services company in Shanghai, where he was responsible for managing payroll for workers assigned to a tech firm, reported the South China Morning Post.

The tech firm uncovered a ‘ghost employee’ after flawless attendance raised suspicion.(Pixabay)

Yang discovered that he had sole control over employee placement, with no salary review process in place. Exploiting this loophole, he first created a fictitious employee named Sun and applied for salary payments in his name. Instead of directing the salary to Sun’s account, Yang transferred the money to a bank card he controlled, though not registered in his name.

When the labour services company noticed Sun had not received his salary, Yang falsely claimed that the tech firm had delayed payment. Over the next eight years, starting in 2014, he fabricated records for 22 ghost employees, pocketing salaries and severance pay without raising suspicion. The exact salaries of these fake employees were not disclosed.

Unmasking the ghost employee

The scam came to light in 2022 when the tech firm’s finance department noticed that Sun had perfect attendance and was receiving timely salaries, yet no one had ever seen him at work. The company reported the matter to the authorities, leading to an investigation into payroll records and bank transactions. The probe uncovered Yang’s fraudulent scheme, which had gone undetected for nearly a decade.

Following his arrest, Yang was sentenced to 10 years and two months in prison for embezzlement. He was also stripped of political rights for one year and fined. Additionally, he was ordered to return 1.1 million yuan ( ₹1.2 crore) of the stolen funds, while his family repaid another 1.2 million yuan ( ₹1.3 crore). The case, which was reported by Chinese media in March, quickly went viral on social media.

“The labour service company’s payroll system had huge flaws which allowed someone like Yang to take advantage of them,” one online user commented.

Another said, “Yang is so bold! He stole so much money while many real employees were suffering from unpaid wages. He should be ashamed.”

Cases of employees abusing their job positions for financial gain are not uncommon in China. In December last year, a woman in Shanghai used 4.5 million yuan ( ₹5 crore) in public funds to hire male models at a bar following her divorce. In another case, an accountant in Shanghai listed his nine-year-old son as a construction contractor and embezzled 22 million yuan ( ₹25 crore) in wages under the child’s name.