my friend is being really dumb

[.Andy]

Don't listen to them all OP. I can't think of any way your friend's plan won't work. You should get yourself a X360 too.

 

[Sun Baked]

You friend has a hole in his head or his plan.

This is the reason the credit card companies "almost always" require a police report to remove fraudulent charges.

Because you need to commit two criminal acts to fraudulently remove charges: the false police report, and credit card fraud.

And the police will probably take the false police report more seriously than the credit card fraud.