My friend just found out that her husband (soon to be ex) is claiming her 3 children on his taxes... On top of that he didn't work at all for the year or lived in the house with them for over a year but has a buddy who makes up fake w2's for him to be able to get this child tax credit... Is there anything she can do to stop this or make sure that it don't happen again?

She should go ahead ane file her own tax return and claim the 3 children as her dependents (I'm assuming here that she is the custodial parent). If the ex has already filed she will not be able to file electronically, as the IRS computers immediately notice the conflict and automatically reject the 2nd filing. So she will have to file a paper copy of her return, and she should include a note to say that she is the custodial parent of the 3 children.

As for the ex having a buddy who makes up fake W2's - the IRS will pick up on that silly scam very quickly, and both the ex and his "buddy" will find themselves facing penalties for fraudulent filings.