My first experience roping hotels with a small EC in Los Angeles involved this exact scam.
Hotel developers hire small contractors, keep their crew busy on one hotel, then ask them to pull permits for another. We though we had more work, but found a non-english speaking crew completing the 2nd hotel on our Permits.
Our EC refused to sign off on the permit, demmand to rework code failures, but our General Contractor threated to stop using us, since he depends on these developers for continued business.
Maybe its just west of the Rockies, were there's too many residential contractors to choose from with cheep labor, and enforcing every liscense violation is impossible. Many small developers in my region are not natives, and initially don't do business by our rules, and if you don't have a plan "B" you can't always force them to do so.