I don't know about them hiring phony teachers but I do know that the outfit located in Shanghai is a total scam. The amount of hours and work that they expect is unbelievable and the salary they offer is an insult. They don't even offer a housing allowance based on their belief that a teacher can find a house in Shanghai for 1500-2000 RMB a month. I would like to know where. The only apartments I have seen for that price are infested with cockroaches and mice and in horrible areas of Shanghai. They also don't offer a full refund of your airline ticket either. I would like to know how much money they are charging their customers and how much of that the foreign teacher actually sees.
Another indication that they are not a good company is that they are forever advertising looking for new teachers. If it was such a great place to work why doesn't anyone want to stay there. Something to think about if you are considering working for them.