CYA, CYA, CYA.
Document the crap out of your findings and suggestions to Management. If they don't listen then you have proof that you informed them of their evil ways. Then you can jump ship and call the SBA.
Personally, I made it my job to uninstall every piece of illegal software in my organization. People didn't like it. People complained. But included in my job description was "ensuring the proper use of software". So, that's what I did. I became the BOFH very quickly.