An employee issues two payments for the same invoice, requests a return of one check from the vendor, and then cashes the returned check. This is an example of which scheme?

• A. A A receivables skimming scheme
• B. B A shell company scheme
• C. C A pass-through scheme
• D. D A pay and return scheme

Answer: (D)

This is a pay-and-return scheme. In this pattern, an employee causes two payments to be issued for the same invoice and then arranges for a refund of one of those payments from the vendor. The returned check is then cashed, allowing the employee to surface cash from the duplicate payment while appearing to follow the normal vendor payment process. The fraud relies on creating a legitimate-looking overpayment and a subsequent vendor refund, which the perpetrator converts into cash.

This doesn’t fit a receivables skimming scheme, which involves stealing cash receipts from customers before they’re recorded. It also isn’t a shell company scheme, where a fake company is used to siphon funds through fictitious vendors, nor a pass-through scheme, where funds are routed through a sham vendor to another party. The core activity here is manipulating the accounts payable process through a duplicate payment and a vendor refund that’s cashed for personal gain.