In a plot straight out of a comedy heist movie, an HR manager in Shanghai managed to defraud his company of millions of dollars by creating fake employees and cashing in on their salaries for nearly a decade until a suspiciously “perfect” attendance record exposed the scheme.
The People’s Procuratorate of Minhang District recently highlighted this case in its 2024 “White Paper on the Prosecution of Duty-Related Crimes,” revealing how the fraudster, identified as Yang, exploited loopholes in the company’s hiring process to pocket 16 million yuan ($2.2 million).
Yang joined the human resources department of a Shanghai technology company in 2014, where he discovered a glaring vulnerability: hiring and payroll approvals were entirely under his control.
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Over the next eight years, he fabricated 22 fake employees with generic names like Xiao Sun and Xiao Li, setting up bank accounts to funnel their monthly salaries directly to himself.
For years, his scheme went unnoticed until late 2022, when the finance department flagged a peculiar detail about one “employee,” Xiao Sun.
Despite being listed as having perfect attendance for six months, no one in the company had ever seen or even heard of them. A deeper investigation led straight to Yang, who admitted to orchestrating the entire operation.
Although Yang returned about 2.3 million yuan ($315,000) with help from his family, it was only a fraction of what he had stolen. He was ultimately sentenced to 10 years and 2 months in prison, deprived of political rights for one year, and slapped with a fine for embezzlement.
The case has become a cautionary tale for businesses, highlighting the dangers of unchecked authority in critical processes like payroll. As for Yang, his perfect attendance at prison roll call is likely guaranteed for the next decade.
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