Did my Associate Commit Domain Name Fraud?

An local internet marketing professional I have been working with offline just created a new website. I had some leery feelings about them, especially after I saw their domain name registration information. Their previous employer is listed as the registrant. They were the business director up until two years ago and had access to the financial accounts they setup.

As I have said, I have started to be suspicious, but mostly about their problems with organization and follow through (as well as the fact they were diagnosed with a personality disorder). They had such a bad credit score they also weren't able to get a credit card for a long time and needed to register another domain with a family member's credit card a few months ago.

Although this is suspicious, I want to make sure I am not going to jump to conclusions here. Is there a legitimate reason their previous employer is listed as the registrant of their company website (maybe they logged into the old account by mistake or put the wrong company info in) or is this is a clear case of fraud? I need to know the situation before I continue to pursue a professional relationship or if I should report this to cover my own a**.