FRAUD HAS NO CONSEQUENCES. At least not "petty" fraud.
how much would it cost them in litigation to get back that $1200. It wouldn't be profitable to sped $2,000 to retreive $1200...(last I heard it cost $2000 for a lawyer to even wake up)... PLUS..they're likely to not get the money anyway...it's gone..

The IRS will pursue someone who struggles to pay $800 in back taxes to the ends of the earth, but if you owe $100,000 and "rattle an attorney" at the revenue agents, they'll be quick to "settle" with you at 1/3 of the original debt.

The IRS is tax supported so the profit/loss thing is different....and they're lazy...who's going to put up a fight? The little guy will cave instantly. The big guys won't...so they go after the little guy.