A friend(us citizen) married someone from another country. He told her he was going to file INS doc. So she can live with him in USA, but now he is asking her for money. She does not have any money to give him, but she wants to live in the US. Is this fraud? What can happen to him, if this information is giving to INS? What can happen to me, since I know what he is doing?

He appears to be in violation, first he does not file the paper work, she needs to be filing them, for citizenship. He can be charged maybe with even criminal state charges of blackmail, If I was this girl, I would report this to just the local police, he will go to jail, they will still be married,