What type of fraud scheme is represented when an employee pays an invoice twice and then asks the vendor to return one of the payments?

The scenario described is a Pay and Return scheme. This type of fraud occurs when an employee makes duplicate payments to a vendor and then requests a refund or return of one of those payments. This typically involves some manipulation or collusion, where the employee may be attempting to pocket the refunded amount as personal gain.

In this case, the employee exploits the trust between the vendor and their employer. By making a second, unnecessary payment under the pretext of an error, the employee secures a refund that they can collect, effectively stealing from their employer.

Understanding the dynamics of a Pay and Return scheme is crucial, as it highlights the vulnerabilities in payment processing and vendor relations within an organization. Employees with access to financial systems can exploit these opportunities, emphasizing the importance of implementing strong controls and checks in financial transactions to prevent such fraudulent activities.