A man in China orchestrated an elaborate fraud scheme, creating 22 fake employees to siphon off 16 million yuan (approximately S$2.94 million) in salaries and severance payments over eight years.

According to Chinese news outlet Xiao Xiang Morning Herald, the suspect, identified by his surname Yang, worked as a human resources manager at a labor service company in Shanghai.

Yang discovered that he had exclusive control over the hiring and resignation processes for employees assigned to a tech company. Notably, salary disbursements were not subject to independent verification, presenting a major oversight that he quickly exploited.

Starting in 2014, Yang fabricated identities for 22 non-existent employees, complete with falsified personnel records. Their salaries were then funneled into a bank account he controlled but was not registered in his name. To avoid suspicion, Yang repeatedly misled his employer, claiming that the tech company had delayed payments.

The fraud continued unnoticed until 2022, when the finance department of the tech company identified an anomaly.

They found records for an employee supposedly named Xiao Sun—who had been on the payroll for six months with perfect attendance—yet no one had ever met him. This triggered an internal probe, leading to the discovery of Yang’s fraudulent scheme.

Sentencing and Restitution

Following an investigation into attendance records and financial transactions, authorities arrested Yang. He was convicted of embezzlement and sentenced to 10 years and two months in prison. Additionally, he was stripped of political rights for one year and fined.

As part of the restitution, Yang was ordered to return 1.1 million yuan, while his family contributed an additional 1.2 million yuan toward repaying the stolen funds.

The case, reported by mainland media in March, attracted much attention on social media. One observer pinpoints that there is a huge flaw in the labour service company's payroll system, which allows someone like Yang to exploit the system.

Another netizen said

"Yang is so bold! He stole so much money while many real employees were suffering from unpaid wages. He should be ashamed."

Reports of crimes involving abuse of job positions are not uncommon in China. In December last year, following her divorce, a woman in Shanghai, went to a bar to find a male models and spent 4.5 million yuan of public funds in just three months.

In another case, a Shanghai accountant listed his nine-year-old son as a construction contractor adn defrauded more than 22 million yuan in wages by using his name.