What is generally the first step in investigating phantom employee fraud?

In the context of investigating phantom employee fraud, examining personnel files is a crucial first step because it provides a foundational understanding of the employees in question. Personnel files contain vital information, such as employment history, job status, and payroll records, which are essential for identifying discrepancies. By reviewing these files, an investigator can determine whether the suspicious employee is genuinely on the payroll, their job roles, and if there are any irregularities in their employment status, such as missing documentation of actual work performed.

This step is vital for establishing a baseline of what should be expected in a legitimate employment situation. After this initial examination, further investigative actions, such as interviews or verifying social security numbers, might follow, but having accurate personnel records helps in guiding those subsequent steps effectively. Analyzing personnel files also helps to avoid premature actions like directly interviewing suspected employees, which could alert them to the investigation and potentially hinder the process.