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fraud is not legal. There's a difference between lying on the playground and fraud in a business setting.

Again: fraud is de facto legal.

It is ubiquitous in every part of the business world, both internal and consumer-facing.

A more useful construct is that civil offenses are only a problem if someone is aware of, motivated, and able to afford to sue you over it. Businesses do a lot of arguably illegal things that are not likely to lead to an actual lawsuit.

They also require articulable and legally legible damages, and if you want to make it worth your time they have to be significant compared to the legal cost and in no significant way attributable to yourself.

A lot of things a laypersons would agree were damages just won't fly in civil court and even when there is damage it's limited by factors like what actions you could have taken to mitigate (but may not have).

De facto is the opposite of de jure, so no, non-enforcement doesn't make it legal

Again, nobody said it was legal. They said de facto legal, which does not mean it's actually legal but just that it's effectively treated as legal.

Fraud is illegally getting money, and IDs are not money.

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