Most likely he was not being paid by payroll. A work group leader was probably being paid in his name for the labor of a half dozen others in the group. On the books it looks like minimum-wage payments to one person. In reality that same payment is divided by several people, with the group leader taking a premium cut.
Cheap labor. No recourse for the workers for anything, because they are illegals. Plausible deniability for the employer. What a sweetheart deal. Until something goes wrong.
I follow your post as one means of cheating the system, but not sure how it would work in this case, given the employer is saying the perp was verified thru e-verify.