The heart of which scheme is in the falsification of payroll records and timekeeping information?

Question

Options

• AFalsified hour's scheme
• Btimekeeping scheme
• Cghost employee scheme
• Dcommission disbursement scheme

• A
  11% (7)
• B
  7% (4)
• C
  79% (48)
• D
  3% (2)

Explanation

Ghost employees are fictitious workers added to a company's payroll - they don't actually perform any work, so the fraudster must fabricate supporting records (timesheets, attendance logs, payroll entries) to make the payments appear legitimate. This falsification of both payroll records and timekeeping information is the defining mechanic of the ghost employee scheme.

Why the distractors are wrong:

• A (Falsified hours scheme): Not a standard fraud classification; it describes a symptom (falsified hours) rather than a recognized scheme category.
• B (Timekeeping scheme): Also not a standard term; timekeeping fraud is a component of several schemes, not a scheme name itself.
• D (Commission disbursement scheme): This targets manipulation of sales commissions - a separate payroll fraud category unrelated to fictitious employees.

Memory tip: Think "ghost = doesn't exist." Because ghost employees never show up, the fraudster has to invent their existence through fake timecards and payroll records - falsification is the only way to make a non-existent person look employed.

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