Sentence Correction

Can someone clear my one doubt i.e whether "that" is used to refer to singular or plural???????

"That guy is fraud."
"Those guys are frauds." Here, 'that' cannot be used.

But in the following situation it can be used to refer to either.

"The questions that people ask here are important."
"This is the question that can make or break my exam."

Also, that cannot modify people.

WRONG: The spies that worked on this mission are experts.
RIGHT: The spies who worked on this mission are experts.

PS: I am going somewhat by what MGMAT SC Guide here. I am still not confident that I have fully grasped the book.
Just a disclaimer.

Already answered above, but just to reiterate, that can be used to modify both singluar and plural.

Games that people play are amazing. (that modifying plural - games)

This is the game that people play the most. (that modifying singular - game)

That, which, who, and whose can all modify (or refer to) singular or plural nouns. As vineeshp pointed out, demonstrative pronouns have number (this/these, that/those).