For it to not be fraud you'd have to actually exchange services proportional to the line items. That isn't what was described. Falsifying line items to juice your numbers is fraud plain and simple.
Yet we see it happening all the time with various AI deals.
No, there is no proportionality aspect to the law. Once you’re in the support and software subscription realm, quite vast amount of “value” can be charged for with nothing being done.
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The company I'm a director for licenses IP from my company. The company wouldn't exist without my IP (I'm one of the founders). Yet, I'm also a customer of the same. Dollars in/out, we're all kosher. This isn't fraud, it's just how companies work.