In which scheme, the employees do not submit the vendor's invoices; rather, they intentionally mishandle payments that are owed to the legitimate vendors?

Question

Options

• Apay-and-return scheme
• Bdisbursement scheme
• Cpass-through scheme
• Ddouble-pay scheme

• A
  70% (39)
• B
  16% (9)
• C
  4% (2)
• D
  11% (6)

Explanation

Option A is correct because a pay-and-return scheme involves an employee manipulating the payment cycle for legitimate vendors - causing overpayments or erroneous payments and then intercepting the vendor's returned/refund check before it reaches the company, rather than fabricating or submitting fraudulent invoices.

Option B (disbursement scheme) is wrong because it's a broad umbrella category covering many types of fraudulent cash outflows - it's not specific to mishandling vendor payments or the return process.

Option C (pass-through scheme) is wrong because it involves a fraudster creating a shell company that buys from the real vendor and resells to the employer at inflated prices - invoices are actively submitted, not bypassed.

Option D (double-pay scheme) is wrong because it requires submitting a legitimate invoice twice (or submitting duplicates) to generate two payments, which is the opposite of "not submitting invoices."

Memory tip: Think of it as "pay out, steal the return" - in a pay-and-return scheme, the fraudster doesn't need a fake invoice because they exploit the refund/return flow itself; the word "return" in the name is your clue that money is coming back from the vendor, and that's what gets stolen.

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