alt Hacker NewsSounds like very straightforward tax evasion. The business brings in lots of cash, doesn't pay taxes, obscures the books enough so that there's no smoking gun. Some of the people participating in the scheme are skimming, but maybe less than the taxes would be, or maybe the owners are also implicated and would face criminal penalties themselves, so it's better for everyone just to keep it going and keep the books messy. Don't need mafiosos from TV for that.
You can have this kind of fraud without tax evasion, by abusing invoicing, business expenses and reimbursements. That's a reason people like when accounting doesn't work properly.
Not saying there was zero tax evasion, but this seems like a separate issue.