A Shanghai technology company was defrauded of a staggering $2.2 million by its own HR manager, who fabricated dozens of fake employees and collected their salaries over eight years before finally being exposed.
In late 2022, employees in the company's finance department noticed something odd: an employee named Xiao Sun had a perfect attendance record for six months—yet no one had ever met them. This discovery led to an internal investigation, which unravelled an elaborate fraud scheme masterminded by the company’s HR manager, Yang.Yang joined the company in 2014 and was responsible for hiring and salary management. He soon discovered a loophole—there was no independent oversight on payroll approvals. Seizing the opportunity, he:
- Created 22 fake employees with names like Xiao Sun and Xiao Li
- Set up multiple bank accounts to receive fake salaries
- Collected millions in fraudulent wages over eight years
Once Yang was identified, he admitted to stealing 16 million yuan ($2.2 million). Although he repaid a portion—1.1 million yuan ($150,000) himself and 1.2 million yuan ($165,000) through his family—it was only a fraction of the embezzled amount.
In 2024, he was sentenced to 10 years and 2 months in prison, deprived of political rights for one year, and fined for embezzlement.
This case, highlighted in the Minhang District’s White Paper on Corporate Crimes, serves as a stark reminder of the need for strict payroll oversight to prevent fraud in corporate settings.
