Not saying this helps in any way for employment purposes today, but the technology is out there in many places.
Here (.nl) you need either a passport or an ID card and you are supposed to verify its authenticity.
Meaning you can use a social security number of a dead person. A common form of immigration fraud.
In Germany you definitely don't have to. None of my past or current employers has ever seen my ID.
But seriously, why would they not be able to? They will almost certainly have high-level connections into the State Dept. (or whatever agency issues passports for your country) that allows them to create any passports they need. Same way the Police can get license plates for undercover vehicles from the DMV that don't list "One Police Plaza" if someone (i.e. "other" Police) runs the plates.
This is the part that doesn't make sense. But the other sibling comment is probably right. It might have been before e-verify was widely in use. Besides, you just run through Checkr and friends unless you know the guy, so this "no record of him" thing would pop up these days.
I suppose I'm not too concerned about this attack vector now that we have this stuff.