[China] HR manager’s 16 million yuan payroll fraud

[China] HR manager’s 16 million yuan payroll fraud
13 Mar 2025

An HR manager at a Shanghai-based labour services company has been caught running an elaborate payroll embezzlement scheme, creating 22 fake employees to steal 16 million yuan in salaries and severance payments, MSN reports.

The accused man, identified by his surname Yang, was responsible for managing payroll for workers assigned to a tech firm.

Mr Yang reportedly learned he had sole control over employee placement, with no salary review process. To exploit the loophole, he initially invented a fictitious employee named Sun and applied for salary payments in his name. Rather than directing the salary to this employee’s account, Mr Yang transferred the money to a bank card he controlled but had not registered in his name.

When the labour services company flagged that Sun had not received his salary, Mr Yang falsely claimed that the tech firm had delayed payment. Over the next eight years, from 2014, he falsified records for 22 ghost employees, keeping the salaries and severance pay without raising suspicion. The salary figures for the ghost employees have yet to be disclosed.

The fraud was reportedly uncovered in 2022 when the tech firm’s finance department noticed that employee Sun had perfect attendance and was getting timely pay but no one had ever seen him in the workplace. The company reported the matter to the authorities, leading to an investigation into payroll records and bank transactions. The probe uncovered Mr Yang’s fraudulent scheme; undetected for nearly a decade.

Mr Yang was sentenced to 10 years and two months in prison for embezzlement, stripped of political rights for one year and fined. He was also ordered to return 1.1 million yuan of the stolen funds, while his family repaid another 1.2 million yuan. The case, widely reported by the Chinese press, quickly went viral on social media.


Source: MSN

An HR manager at a Shanghai-based labour services company has been caught running an elaborate payroll embezzlement scheme, creating 22 fake employees to steal 16 million yuan in salaries and severance payments, MSN reports.

The accused man, identified by his surname Yang, was responsible for managing payroll for workers assigned to a tech firm.

Mr Yang reportedly learned he had sole control over employee placement, with no salary review process. To exploit the loophole, he initially invented a fictitious employee named Sun and applied for salary payments in his name. Rather than directing the salary to this employee’s account, Mr Yang transferred the money to a bank card he controlled but had not registered in his name.

When the labour services company flagged that Sun had not received his salary, Mr Yang falsely claimed that the tech firm had delayed payment. Over the next eight years, from 2014, he falsified records for 22 ghost employees, keeping the salaries and severance pay without raising suspicion. The salary figures for the ghost employees have yet to be disclosed.

The fraud was reportedly uncovered in 2022 when the tech firm’s finance department noticed that employee Sun had perfect attendance and was getting timely pay but no one had ever seen him in the workplace. The company reported the matter to the authorities, leading to an investigation into payroll records and bank transactions. The probe uncovered Mr Yang’s fraudulent scheme; undetected for nearly a decade.

Mr Yang was sentenced to 10 years and two months in prison for embezzlement, stripped of political rights for one year and fined. He was also ordered to return 1.1 million yuan of the stolen funds, while his family repaid another 1.2 million yuan. The case, widely reported by the Chinese press, quickly went viral on social media.


Source: MSN

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