A shocking case of corporate fraud has emerged in China, where an HR manager created 22 fake employees and stole 16 million yuan (₹18 crore) over eight years. The accused, identified as Yang, worked at a labour services company in Shanghai and exploited loopholes in the payroll system to siphon off salaries and severance payments.
How the Fraud Started
Yang discovered that he had full control over employee placements without any salary verification process. In 2014, he created a fake employee named Sun and applied for salary payments under this name. Instead of transferring the salary to Sun, he redirected the funds to a bank account he controlled but was not registered in his name.
When the company questioned why Sun had not received his salary, Yang falsely claimed that the tech firm delayed the payment. Encouraged by the success of his scheme, he expanded it by creating records for 22 non-existent employees and continued pocketing their salaries and severance payments for the next eight years.
Fraud Exposed After Eight Years
In 2022, the fraud came to light when the tech firm’s finance department noticed something unusual. Sun had a perfect attendance record and received salaries on time, yet no one had ever seen him at work. This raised suspicion, prompting an internal investigation. A deeper audit of payroll records and bank transactions soon uncovered Yang’s fraudulent activities.
Legal Action and Punishment
Following the investigation, authorities arrested Yang and charged him with embezzlement. He was sentenced to 10 years and two months in prison, stripped of his political rights for a year, and fined. Additionally, he was ordered to return 1.1 million yuan (₹1.2 crore) of the stolen money, while his family repaid another 1.2 million yuan (₹1.3 crore).
Public Reaction and Similar Cases
The case quickly went viral on Chinese social media, with many users criticizing the company’s weak payroll system. One user commented, “The company’s payroll system had huge flaws, allowing someone like Yang to take advantage.” Another added, “He stole so much money while real employees struggled with unpaid wages. He should be ashamed.”
This is not the first case of payroll fraud in China. In December last year, a woman in Shanghai embezzled 4.5 million yuan (₹5 crore) in public funds to hire male models at a bar after her divorce. In another shocking incident, an accountant in Shanghai listed his nine-year-old son as a construction contractor and stole 22 million yuan (₹25 crore) in wages under the child’s name.
Yang’s case serves as a major warning for companies to strengthen their payroll systems and prevent similar frauds in the future.
