Oh yes, it can happen. Companies issue paychecks to people who don’t work for them and don’t realize it. And how many recipients of these checks are voluntarily returning them to the company?
Telecommunications provider Avaya became aware of this problem the hard way. The company paid Anthony Armatys for almost five years, and he never worked for them! In 2002, Armatys accepted a job with Avaya, but changed his mind before he even started. Even though he never worked a day at the company, they gave him regular payroll deposits into his account. The error wasn’t discovered until early 2007, and by that time he had received almost $469,000.
You’re asking yourself how this could happen, aren’t you? Well there’s a simple answer. The company didn’t have checks and balances in place to make sure that those who were getting paid were really working. Someone set this person up on payroll… and it was on autopilot for almost five years.
Avaya is now being charged with theft by deception, but the chances that the company will recover all of its money are slim. Too bad the company didn’t have internal controls in place to detect this kind of error.