I think the liability issue is a good one for argument's sake or to intimidate the GC or owner with rightous indignaton, but in reality, I doubt it would ever stick. If the GC or owner lies, they're the ones liable for fraud. I don't think it is realistic to put the burden on the EC to also be the honesty police and have to patrol slimey characters like these.
If you can catch them in the act and drop one of Trainwire's wrenches into this guy's job and give him a little justice, by all means please do so. But I personally don't think it is an issue (at least where I come from) that would keep me up at night worrying that someone is exposing me to liability behind my back. I hope I'm not wrong.
