What is the goal of a ghost employee scheme?

The goal of a ghost employee scheme is to generate paychecks for individuals who do not work. In this type of fraud, a perpetrator creates fictitious employees within a company's payroll system. These "ghost" employees never actually perform any work but are used to siphon off funds from the organization. The fraudster can then collect the paychecks issued to these nonexistent workers, which can be a significant financial loss to the company.

This scheme typically involves exploiting the payroll process and relying on weaknesses in internal controls. By creating fake records, the fraudster can successfully deceive the company into processing payments that should not exist. The gain from these fraudulent activities comes at the expense of the organization, highlighting the importance of robust payroll verification processes.