What type of fraud involves creating a shell company to sell returned merchandise back to the employer?

The correct answer is based on the nature of the fraud scheme described. A pass-through scheme involves creating a shell company to facilitate the unauthorized sale of products—often including returned or misappropriated items—back to the original employer or other entities. In this situation, the shell company acts as an intermediary that deceives both the employer and potential customers.

In this type of scheme, the fraudster stands to gain by profiting from the resale of merchandise that is intended to be returned or that should not be sold. The creation of a shell company adds an additional layer of deception, as it obscures the true source of the merchandise and can mislead those involved into thinking that transactions are legitimate.

Other types of schemes mentioned do not lend themselves to this specific behavior. Cash larceny, for instance, typically involves stealing cash directly from the business's funds. A forced reconciliation scheme usually refers to manipulating financial records to cover up discrepancies, and skimming involves taking cash before it is recorded in the financial system, neither of which captures the essence of selling merchandise through a shell company. Thus, the pass-through scheme uniquely fits the scenario described in the question.