I didn't trust my instinct and hired a guy that was a pathological liar. Almost ruined the whole company. This was during the dotcom bubble and programmers where hard to come by. My company didn't pay as well as the (soon to be bankrupt) flashy dotcom firms. I really needed people and I let myself think "OK, he is odd, but maybe it's just my bias".
His office soon turned into a dump, he didn't show up to important customer demos ("Oh, I told you I was going to visit my sister", "I got a bad allergy after vaccination, I'm in the hospital."). He could spend weeks not producing anything, and have very elaborate excuses. Some periods in the beginning he did really good work. So I had to weigh the pros and the cons of keeping him. And maybe I wanted to avoid a conflict. I was young and had never met a person that could lie and cheat without feeling bad.
The worst was that he blamed his co-workers for everything. People wanted to leave. And I, as the middle manager, was caught between caring for the team, getting the work done and be accountable for the managers above me.
I should have ended his employment after a week. There where enough bad signs.
One day he just disappeared. We were worried and went to his house. It was empty. Never heard from him again. After a month his office phone rang. It was his mother. I had to tell her that he was missing. "Oh, not again", was her reply.
When recruiting, listen to your instincts. And be proactive when a team member is not functioning. One person could ruin a team.