A human resources manager in Shanghai orchestrated a massive salary fraud, creating 22 fake employees to siphon off 16 million yuan (Rs 18 crore) over eight years. The accused, identified as Yang, managed payroll for a labour-services company that supplied workers to a tech firm.
Exploiting a lack of oversight, he manipulated the system to divert salaries into his own accounts.
Yang discovered that he had full control over employee placements, with no independent salary verification. In 2014, he created a fictional worker named Sun and processed salary payments under this name. Instead of transferring funds to a legitimate account, he routed the money to a bank card he controlled.
When the labour services company inquired about missing payments, Yang falsely blamed the tech firm for delays. Over the years, he expanded his scheme by fabricating payroll records for 22 ghost employees, collecting their wages and severance pay without raising suspicion. The company remained unaware of the fraud for nearly a decade.
The scam was exposed in 2022 when the tech firm’s finance team noticed irregularities. Sun had a flawless attendance record and regular salary payments, yet no one had ever seen him in the office. This triggered an internal audit, leading to a deeper investigation into payroll records and financial transactions.
Authorities uncovered Yang’s embezzlement scheme and arrested him. He was sentenced to 10 years and two months in prison and stripped of his political rights for a year. Additionally, he was fined and ordered to return 1.1 million yuan (Rs 1.2 crore), while his family repaid another 1.2 million yuan (Rs 1.3 crore).
The case quickly gained attention on social media, with many criticising the company’s weak payroll controls. Workplace fraud is reportedly common in China.
