Ghost Employees

Managers have the authority (but not the license!) to issue paychecks to fictitious employees or real persons who have ghostly appearances. 

Herman didn't seem to be the type of person who dabbled in the supernatural. But as a manager for a medium-sized company, he had hired more than 80 ghost employees to his payroll.

The ghosts were actual people who worked at other jobs for different companies. The manager filled out time sheets for the fictitious employees and authorized them, then took the resulting paychecks to the ghost employees, who cashed them and split the proceeds with him. Herman's authority in the hiring and supervision of employees enabled him to perpetrate this fraud.1

Simply enough, a ghost employee is someone on the payroll who doesn't actually work for a victim company. Through the falsification of personnel or payroll records a fraudster causes paychecks to be generated to a ghost. The fraudster or an accomplice then converts these paychecks. (See "Ghost Employees" flowchart on page XX.) The ghost employee may be a fictitious person or a real individual who simply doesn't work for the victim employer. When the ghost is a real person, it's often a friend or relative of the perpetrator.