Quote from @Michael Smythe: Fraud implies criminal activity, which Subject-To is not if done correctly.Transferring ownership of a property with a mortgage on it, MAY be a violation of the mortgage contract, but that is not fraud and no one will be prosecuted.

has anyone ever been prosecuted for violating this clause?

I have heard no reports of any temporary ban on prosecuting shoplifters.I see this as an unintended consequence, and hopefully a temporary one.

I am a prosecuting attorney. 

There are news articles which seem to say so. https://www.miaminewtimes.com/news/bill-would-help-break-floridas-solar-panel-stranglehold-10971356  While I am admittedly not a lawyer, I can find no record of any landlord in the US ever having been sued or prosecuted for charging a tenant for the electricity produced by solar panels that the landlord owns on his/her own property, when the  tenant living in that property has used the electricity. 

It's okay that you likely didn't know that, but I don't recommend your prosecute your doomed case any further. 

But now a days the title policy will read to that beneficiary and any subsequent assignee's.. and Tim I posted the state of CA disclosure document we used for multi bene loans. so you can see that.what should happen in these multi bene loans is a document that allows the sponsor to prosecute a foreclosure.. if you dont have that each bene has to agree and that is were these get sticky..  4 investor say foreclose and one says nope.. keep in mind in the mid 80s in the Bay area our loan sizes were already 200 to 500k for HML.

This seems to effectively mean that if you do not accept section 8 you could be prosecuted for discrimination.

I would ask her to call the cops next time she sees one, so they can arrest and prosecute the ghost for trespassing. 

Bank fraud is the easiest to prove, show and prosecute, no loss needs to be suffered by a bank, only the fact that they were given false information in a loan application needs to be shown.