Thing is, share dilution is not much different from giving an employee or vendor a huge pile of money in exchange for labor that turns out not to generate much revenue. It is bad for business (and will be reflected in a share value drop), but how can you prove it is fraud?

Hmmm... It's rather convincing when you put it that way.

Yes, it's called The Law of Supply and Demand. Once they increase the supply of the stocks too much, the demand will go down and they'll have to go back to having 3 summer homes instead of 4, and 2 private jets instead of 3.

Yes but shouldn't the demand for stock be translated into the stock price going up? And not a backdoor to dilute the cake?