Which fraud scheme involves falsifying payroll records to issue paychecks to someone who does not work for the company?

• A. Falsified salary scheme
• B. Record alteration scheme
• C. Ghost employee scheme
• D. Inflated commission scheme

Answer: (C)

Ghost employees are fake workers added to the payroll so paychecks go to someone who does not actually work for the company. The fraudster creates a fictitious employee in the payroll and processes payroll as if that person earned wages, often routing the money to an accomplice or to themselves. This exploits weaknesses in hiring or payroll maintenance and can persist if timekeeping and employee verification aren’t independently checked.

This fits the scenario best because the key element is paying someone who isn’t performing work for the company. Other schemes involve manipulating payments for real employees or altering records to conceal theft, rather than creating and paying a non-existent worker.