Many years ago, I worked at a shop doing oil changes and stuff. It was a part-time job during high school and college. There was a smaller shop up the road that didn't have an alignment rack, didn't have the stuff to do AC work, and some other things - so they would sublet that work to us.

They ended up getting shut down for some shady stuff like what the OP described and the shop I worked for ended up getting all of their business. I remember hearing that both mechanics lost their inspection licenses - one of them was the owner.