Make a decision with your husband.
You both should probably ditch them both as friends. Because both will be exhausting for different reasons.
The only solid relationship is between you and your husband. (Maybe!)
Unless you're just a trouble maker or drama queen. Or jealous she has more disposable income.
It doesn't help the split couple, if they're amicably being parents togethers, if you start poisoning the air.
Equally, it doesn't help dad, if he's being fleeced.
So decide how much you want to be involved. And then decide your moral stance.
The right thing to do would be to tell her you don't agree with scamming her ex, and as the wife of husband who maintains a relationship with her ex, you just feel you need to step out.
The concern that your neutrality has made you stray into enemy camp, might make her backtrack on exploitation, and fear of ex recovering overspend - or even demanding to be primary parent becuase of her fraud.
But whatever you decide, you should step out the situation. Going on a holiday with someone you know is paying for it fraudulently makes you equally guilty by association.
So how shocked are you? Or are you only shocked if it doesn't interfere with your own enjoyment?