Co-workers willing to lie, cheat and steal to get a promotion?

How would you deal with this situation? There is a co worker at my hubby's workplace that is willing to totally debase himself to jump over my husband's head. By company rules, he has less seniority than my husband and therefore isn't allowed to jump over his head, but he's trying, hoping hubby won't notice. There is a big raise involved with this promotion, so hubby isn't willing to let it go.
I should add that the boss is probably in on the scheme, but this isn't corporate at least.
The boss's sales are way down and head office is aware of it. We think his own job is in jeopardy and he is willing to promote someone he thinks is a 'go-getter' to 'fluff' his numbers. He tried to fire upper-echelon employees with 25+ years seniority and head office said no, he couldn't do that. These people are really friggin' scary!