A huge percentage of her students turn in plagiarized papers; so many that, if she were to follow the school's guidelines on them all, would result in 1/2 to 3/4 of her students failing. The teacher's pass/fail percentage is one of the criteria used to determine whether a teacher gets any more classes, and does not take into account students failed for plagiarism.
So, if she were to fail those students, she would not get any more classes to teach, thus she'd be out of a job. She's forced to keep track of who she's failed what paper for, to spread the bad grades across as many of the plagiarizers as possible, to cut down on the number that outright fail (and thus impact her).
She has gotten absolutely no support from her superiors about this issue. However, another teacher I know at the same school has a slightly milder version of the same problem, but her superiors are more supportive of her, meaning she's not always worried about her position.
It's pretty fucked up, and kind of depressing.