A human resources manager at a Shanghai technology firm has been jailed for orchestrating a multi-million-dollar fraud scheme, in which he "hired" dozens of fake employees and collected their salaries over several years.
The People’s Procuratorate of Minhang District, Shanghai, recently released a White Paper on the Prosecution of Duty-Related Crimes by Company and Enterprise Personnel in Minhang District, highlighting corporate fraud cases handled in 2024. One particular case gained national attention, exposing an elaborate scheme that went undetected for nearly a decade.
In 2022, finance department staff at an unnamed Shanghai technology company noticed something unusual. A supposed employee named Xiao Sun had been on the payroll for six months with a flawless attendance record—yet no one had ever met or even heard of them. This discovery led to an internal investigation that unravelled a major financial scam.
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The fraud was traced back to Yang, a human resources officer who had worked at the company since 2014. Tasked with managing employee records and approving hires, he exploited a critical oversight—no one monitored salary payments beyond his approval. Seizing the opportunity, Yang created fictitious employees with names like Xiao Sun and Xiao Li, set up multiple bank accounts, and channelled salaries into them.
Over eight years, he fabricated a total of 22 fake employees and siphoned approximately 16 million yuan (£1.7 million). His scheme collapsed in late 2022 when finance staff flagged Xiao Sun’s suspicious employment history. When confronted, Yang confessed to the fraud.
Despite managing to repay 1.1 million yuan (£130,000) himself and an additional 1.2 million yuan (£140,000) with the help of his family, the total recovered was only a fraction of the stolen funds. Yang was sentenced to 10 years and 2 months in prison, stripped of his political rights for a year, and fined for embezzlement.