The HR Scam: How He Stole Millions From The Company Without Even Showing Up For Work?
An HR manager at a Shanghai-based technology business embezzled Rs 20 crore by creating phantom workers and pocketing their salary. The scheme went unnoticed for eight years, until a bogus employee's flawless attendance raised suspicions. An internal inquiry uncovered the fraud, leading to Yang's confession and punishment. The event highlights the importance of rigorous payroll control.
Wow! This scam makes joke of corporate security at its finest! Just when you thought companies had their financial systems locked down tighter than a submarine hatch that includes enormous layers of security, there comes a story that makes you wonder if anyone’s actually having the golden key. Gather round concerned CFOs alike, because this news from Shanghai is about to become your favorite cautionary bedtime story.
In what can only be described as the employment equivalent of “The Emperor’s New Clothes,” a crafty HR manager in Shanghai executed what might be the most gloriously audacious workplace scam of the decade. For EIGHT YEARS, nearly a decade—yes, let that sink in—this enterprising individual managed to create an entirely fictional, fake workforce of 22 employees whose only job was transferring company money directly into his bank accounts.
The scheme was breathtakingly simple, which is probably why it worked so beautifully. Our main hero of the story, Yang, once identified that he had sole authority over the company’s hiring, firing, and payroll processes. If you’re already horrified at this scenario, congratulations—you’ve shown more risk management awareness than a whole Shanghai technology firm.
Yang’s masterstroke began in 2014 when he had the golden realization that nobody was checking his work. Absolutely nobody. So he did what any self-respecting scamster would do—he created 22 imaginary friends named things like “Xiao Sun” and “Xiao Li” and put them on the payroll. These industrious non-existent workers diligently collected their salaries for nearly a decade without ever complaining about working conditions, requesting time off, or demanding raises. We can award them for this employee loyalty! Even bots cannot achieve this!
The beauty of the scheme lay in its boredom! In a world obsessed with sophisticated cyber attacks and elaborate financial crimes, Yang simply opened multiple bank accounts, linked them to the payroll system, and proceeded to collect approximately 16 million yuan (that’s a cool $2.2 million or Rs 20 crore) without breaking a digital sweat.
Now, you might be wondering how on earth this went undetected for eight entire years.
- Did no one notice the extra salary expenses?
- Did managers never question who these people were?
- Did coworkers never wonder about these mysterious colleagues they’d never met at the water cooler?
Apparently not!
The company’s oversight was so magnificently nonexistent that Yang might as well have named his phantom employees “Totally Fake Person” and “I’m Stealing Money” for all the difference it would have made.
The final showdown of HR’s Scam
But even the most brilliant criminal masterminds eventually make mistakes, and Yang’s downfall came from—ironically—creating too perfect an employee. One of his ghost workers, Xiao Sun, achieved the impossible feat of perfect attendance for six straight months. Anyone who’s ever worked in an office knows this is the true red flag. Real humans get sick, oversleep, have family emergencies, or occasionally just need a mental health day to avoid committing crimes against their coworkers. Perfect attendance isn’t dedication—it’s statistically suspicious.
When the finance department finally decided to investigate this paragon of workplace virtue in late 2022, the house of cards came tumbling down faster than productivity during a surprise office party. No one had ever seen this supposedly perfect employee. No one had ever spoken to them. No one could point to a single piece of work they’d completed. It’s almost as if—gasp!—they didn’t exist at all!
Cornered by investigators with this shocking revelation that imaginary people don’t actually show up to work, Yang confessed to his elaborate scam. In a halfhearted attempt at making amends, he returned Rs 1.3 crore ($150,000), and his family chipped in another Rs 1.4 crore ($165,000). That’s about a fraction of what he stole—a minor percentage that would make most bank robbers slow-clap in appreciation.
What is the punishment of his scam?
A prison sentence of 10 years and 2 months, a fine, and one year of deprivation of political rights. One has to wonder if the extra 2 months was added just to make sure he really thought about what he’d done.
What the companies can learn from this scam?
The moral of this story isn’t just “don’t commit scam” (though that’s certainly a takeaway). It’s about the spectacular failures that happen when companies put blind faith in single-point control systems. Yang’s scheme worked because he was the beginning and end of the payroll process, with no checks, balances, or basic common-sense questions like “Hey, has anyone actually seen this Xiao Sun person who supposedly works here?”
Security experts weren’t shocked by this case. In fact, payroll scam is more common than most companies want to admit. The shocking part is how long it continued and how it was eventually discovered. Not through sophisticated auditing or cybersecurity protocols, but because someone finally noticed that perfect attendance is about as realistic as a unicorn with an accounting degree.
So the next time your company celebrates an employee for never missing a day of work, perhaps instead of applauding, someone should verify they actually exist. And for goodness’ sake, if you’re in charge of financial controls at your organization, maybe—just maybe—consider implementing a system where one person can’t single-handedly create a small village of imaginary employees.
After all, the only thing more embarrassing than being robbed is being robbed by employees who never even existed in the first place.
