>What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.

I think the "fraud" comes from the fact that they use it for personal purposes but fail to declare it on their income tax returns as they should[1]. For the typical case of a general contractor or an electrician using their "work" pickup truck to buy groceries or even to commute, that expense is not tax-deductible and must be declared as a fringe benefit.

[1] https://www.irs.gov/publications/p15b#en_US_2024_publink1000...