First of all, I don't answer hypothetical questions. Present me with facts and I'll make a ruling. Without that, I can't....
Obviously, the way you present them, it would seem to smell. As I say, it was your presentation; I don't know the actual facts, etc.
As my predecessor in title so rightly put it, the act specifically allows for sponsored travel, so if there's a situation, you have to compare the actual facts against the provisions of the law and make sure they have complied.
If this were to come up now, I would do exactly that. I would look at the facts and make sure that whatever provisions in the code that are pertinent to the situation have been complied with.