I have heard a similar story from an HR consultant, minus the whole "criminal" element. It far less likely at a public company but think of something like a cal

I have heard a similar story from an HR consultant, minus the whole "criminal" element. It far less likely at a public company but think of something like a call center or factory, a smallish business, ~30-100 employees, where the owner has hired managers running it. If someone devious gets in a position of hiring power they use favoritism and undisclosed relationships to build a fiefdom. It might not go as far as stealing money, but they could be creating extra jobs for their friends and fobbing the actual work off to underlings, basically just freeloading off the business. If the owner doesn't know the clique exists it could be hard to see the signs. I'm pretty far OT here WRT drug testing, but anyway a good HR department should be more than a cover-your-ass paperwork machine.