Case study · Investigations
Workers Who Never Clocked In
A garment manufacturer paid wages and statutory dues for contract workers who did not exist, through a labour contractor and its own time office.
- Ghost employees & payroll fraud
- Collusion with third parties
- Kickbacks
- ghost headcount in affected units
- ~12%ghost headcount in affected units
- annual overbilling quantified
- ₹2–3 Crannual overbilling quantified
- units affected
- 2 of 6units affected
- billing to gate data
- Linkedbilling to gate data
01The situation
The headcount was billed every month. The workers were never on the floor.
A garment manufacturer relied on labour contractors for much of its workforce. Labour cost per piece in two units crept up while output stayed flat.
How it came to us
Cost per garment rose in two units without any change in output or wage rates.
02How it worked
- 01The labour contractor billed for more workers than were deployed, supported by attendance records from the unit's time office.
- 02Ghost entries reused identities of former workers and relatives.
- 03Wages and statutory contributions for ghost workers were paid to accounts controlled by the contractor.
- 04The time-office in-charge overrode biometric exceptions and received a monthly share.
Swipe sideways to see the whole diagram.
- Outside parties
- Insiders involved
- The organisation
- Where the money ended up
- Repeats / feeds back
How it was hidden
Manual overrides of attendance exceptions, identities of real past workers, and ghost numbers kept to a steady percentage.
03The challenge
Test thousands of worker records across units and contractors, and separate ghost workers from genuine churn.
What made it hard
- Thousands of workers and high churn
- Several contractors
- Identity records of variable quality
- Need to protect genuine workers' wages
Red flags that were there to see
- Labour cost per piece rising with flat output
- High rate of manual attendance overrides
- Shared bank accounts across workers
- Workers with no canteen, gate or production records
04Our approach
- Workstream 01
Payroll and attendance analytics
Full-population review across units and contractors.
- Workstream 02
Physical headcount verification
Unannounced checks at shift changes.
- Workstream 03
Statutory records reconciliation
Contributions against deployed workers.
- Workstream 04
Contractor financial review
Where the wages for ghost entries went.
The breakthrough
Physical headcounts at shift change, set against billed attendance, gave a consistent gap in the same two units, and the payment trail for the missing workers ended in accounts linked to the contractor.
05What we found & did
- About 12% of billed headcount in two units did not exist.
- Wages and dues for ghost workers reached contractor-controlled accounts.
- Time-office overrides enabled the scheme.
- The time-office in-charge received a monthly share.
- The other units were clean.
- Billed
- 100
- Verified
- 88
Illustrative
06The impact
The company recovered overbilling from the contractor, replaced it, removed manual attendance overrides and linked contractor billing to verified gate and production data.
- ghost headcount in affected units
- ~12%ghost headcount in affected units
- annual overbilling quantified
- ₹2–3 Crannual overbilling quantified
- units affected
- 2 of 6units affected
- billing to gate data
- Linkedbilling to gate data
07Lessons for your business
The controls that would have stopped this, or caught it sooner:
- Pay contractors only against independently verified attendance.
- Flag shared bank accounts across workers.
- Restrict and review manual attendance overrides.
- Run surprise headcounts.
~₹5 Crundue benefit quantified
The CEO's Three Vendors
A subsidiary CEO routed a rural retail rollout through vendors fronted by his own associates. The money trail led back to him.
- Procurement reconstruction
- Corporate and statutory records
- Ground intelligence
- Funds-flow tracing
US$4.7M+diversion traced to the founder
Zero Skin in the Game
An investor funded a road-construction contractor. Within months, the founder's own contribution had quietly gone to zero and the diversion had begun.
- Records digitisation
- Funds-flow reconstruction
- Personal wealth analysis
- Corporate and property records
~1Memails and documents reviewed
The Fortune That Wasn't There
Shareholders suspected their managing director of hiding a fortune. On the data available, the money trail did not support that suspicion, and it surfaced employee frauds instead.
- Digital forensics
- Source and application of funds
- Related-party mapping
- Market intelligence
Client names and identifying details are withheld to protect confidentiality. Specific references and client experiences can be shared on request, with the client’s consent.
Confidential consultation
Facing challenges at work? Speak to us, and we can help you uncover the truth.
Every matter is different. Tell us what is happening and a senior expert will advise on next steps, in strict confidence.