Most of the client knows that the experience which consultant shows are not real. They just want to know if you can perform the work or not. I have worked with lots of different consulting companies (American & Desi) and even with clients directly. Everybody know everything.
It is something like "Don't tell Don't ask" scenario.

And regarding sidster view ""This fraud or abuse is the way that provides cheaper labor"." I agree on that.
Let me explain how. If you boycott all those fake resume then employer can't find sufficient number of applicants and when you have less number of "Real experienced" applicants, consultants will demand more pay rate. That means consulting companies have to ask more from end clients and ultimately "Real Experienced Consultants" get more.
It is a simple "Supply & Demand" math. When the supply is low, price will go up and viceversa.

You can take an example of recent nursing job market.

Back in 2005-2007, Nursing used to be a high paying job and you can't fake it nursing like IT. So US had high demand of nursing but there weren't sufficient amount of nurses in the market. That is why Nurses used to get very high rate.

After 2008-2009, US brought lots of nurses from foreign countries like India, Philippines . So US got flooded with nurses. Now Nursing is one of the low paying job in this market. People who used to get $45 dollar are getting $30 dollar.

So government is playing very dirty game and people keep fighting "I am republican " "I am Demacrates", "I supports Mitt, I support OBAMA". These are just bull$hits.