By the actual definition you post here you are correct. I was discussing the issue as a criminal offense. I'm not sure there is any of that here. Also, going strictly by the definition of fraud there is some fraud I approve of. Is an undercover agent involved in some kind of trickery? Is he an imposter? If that is fraud then I approve of it in that case. Do you?
The thing being called into question here is the ethics of the NO and LA government, and it is pretty clear it stinks. Our system falls apart without highly ethical people in positions of power - LA fails, and cannot be saved by the US government throwing money into this pit.