A human resources manager in Shanghai has been sentenced to over ten years in prison after orchestrating a massive payroll fraud scheme that lasted eight years. The manager, identified as Yang, created 22 fake employees and funneled their salaries into personal bank accounts, stealing a total of 16 million yuan ($2.2 million).
Yang exploited their unique position within the company, as they were solely responsible for salary payments, hiring, and resignations. The fraud was uncovered in 2022 when finance staff noticed a supposed employee, “Xiao Sun,” who had a perfect attendance record but was unknown to anyone at the company. Further investigation revealed that all 22 employees created by Yang were fictional.
Authorities froze bank accounts linked to the fraudulent scheme, and Yang was ordered to return a portion of the stolen funds. Their family contributed to the repayment, but the recovered amount was only a fraction of the total stolen. In addition to the prison sentence, Yang’s political rights were stripped for a year, and they were fined for embezzlement.
The case highlights vulnerabilities in corporate payroll systems and the risks of unchecked internal control. It also serves as a warning to businesses about the importance of financial oversight and fraud detection measures.
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