I think I am going to come down on the side of Shustraya on this subject. There are lots of honest teachers in Thailand who work for schools or other organisations who do absolutely fuck all to help those people sort out the legal paperwork. They know they are employing teachers illegally, and they don't care. If they get caught, the teachers lose out and they just get replaced. The government won't shut down the school but they'll happily screw the teacher as an individual. The standard of English education in Thailand is not so hot that it will affect the future of a student. Any suggestion of this is pure bollocks. If my French teacher happened to be shit and I wanted to go and live in France to work, I'd simply sort it out myself by learning the language again. Education is something you can always go back to. Anyway, I'd probably learn more French by being there than I would in a classroom.
Thailand makes it incredibly difficult sometimes and schools are often very very slow at sorting out paperwork. It's all too easy to lay the blame on the teachers - but it's such a minor problem in this country.
However, if a teacher has gone to the trouble of forging documents in order to teach, that's a different issue altogether.
The comparison with not having a driving license is ridiculous. If you haven't got a driving license then you're a tosser for even thinking of getting behind a wheel. A teacher isn't likely to kill someone for not being qualified.