In an astonishing tale of corporate deceit, a Shanghai-based HR manager exploited systemic loopholes to orchestrate a sophisticated embezzlement scheme, siphoning off approximately ₹20 crore over eight years.
The Genesis of the Scam
Starting in 2014, the HR manager, identified as Yang, capitalized on his exclusive control over hiring and payroll processes within a tech firm. Recognizing the absence of stringent oversight, he fabricated 22 fictitious employee profiles, complete with impeccable attendance records and bank accounts under his control. These “ghost employees” received regular salaries, all funneling directly to Yang.
The Unraveling
The meticulously crafted fraud unraveled in 2022 when the finance department noticed that one employee, “Xiao Sun,” had a flawless attendance record but was unknown to any staff member. This anomaly triggered an internal investigation, revealing the extensive network of non-existent employees and the massive financial drain they represented.
Consequences and Legal Repercussions
Upon discovery, Yang was convicted of embezzlement, receiving a sentence of 10 years and two months in prison. He was also fined and ordered to return a portion of the stolen funds, with his family contributing to the restitution. Despite these measures, the recovered amount was only a fraction of the total embezzled.
Lessons Learned
This case underscores the critical importance of robust internal controls and regular audits in preventing payroll fraud. It serves as a cautionary tale for organizations worldwide, highlighting how unchecked authority and lack of oversight can lead to significant financial losses.