Bogus?...It is real martial arts.
Fraud?...The line is less clear, but I believe that according to the law no, there is no fraud. Since the word "shaolin" in the United States has no legal definition, it can refer to almost anything. Heck, even in China there are tons of styles that say they are "shaolin", or from shaolin, and they're all very different. No one can prove it didn't derive from shaolin.
Shaolin derived martial arts exist all over southeast Asia, not just in China. Different languages have different words for it, but it's the same thing. In Malaysia, Vietnam, Singapore, Thailand, and Indonesia, Chinese people emigrated and brought their martial arts with them.
Sin The is of Chinese heritage, born and raised in West Java, Indonesia. I believe he attended the school of Ie Chang Ming, which according to his brother actually had several instructors all teaching different styles. Like a little "shaolin temple" of martial artists of their own community. The forms and styles which make up the core of the Shaolin Do curriculum are all known to be commonly found in the area of West Java, including internal arts tai chi, pa kua, and hsing i. Except for the internal arts, all the styles are considered "shaolin derivative". Indonesian brands of Lohan, White crane, and black tiger are all found in that area. This is pretty much what makes up the first 2-3 years of the shaolin do curriculum.
I believe Shaolin Do is primarily a blend of Chinese kuntao from West Java. There are some forms added later to the style from outside sources, I think, but primarily everything taught can be found in Indonesia.
A legitimate complaint against the style, I feel, is that there is too much material taught too quickly. The practicioners would move and look better if more time was spent on the basics, and on each form and style. But it is widely acknowledged among almost everyone I've talked to from all over the country, that the pace of learning is very fast. The schools in the west, (which aren't called Shaolin Do, but "Chinese Shaolin Centers"), all have this problem.
Although Japanese words were used within the style, there is no Japanese or Okinawan content. Why these terms were chosen I can only guess. Maybe in the Indonesian school they did this, and it was just transplanted, as is the official excuse. I rather think some of it has to do with the fact that Sin The did not speak any English when he came here, he was self-taught. In the US, back then, and even today, most people use the word "karate" to mean any Asian martial art. No one had ever heard of shaolin, or kuntao, or quan fa, or any other Chinese or Indonesian term. I wouldn't doubt that some of Sin The's first students had experience in karate, and were familiar with the Japanese terms for everything. My theory is that Sin The chose to call his style "karate", because that is what everyone he knew in Kentucky called it. He used Japanese style uniforms because that is what was available in Kentucky in the sixties, and a belt system like Japanese martial arts, because that is what other successfull martial arts schools were doing.
Today, the schools in the western US have dropped all Japanese terms, but still use the Japanese uniform. In Georgia, they have even adopted a Chinese style uniform. What you call things and how you dress doesn't change the content of the style.
It is not traditional Chinese martial arts in a cultural sense, because it comes from Indonesia. But the Indonesian kuntao styles are close to their Chinese counterparts, because they are practiced primarily by the Chinese immigrant community.
It is true, if you read an advertisement and think you are going to get shaolin martial arts as seen at the temple today, you may feel mislead. From what I am told, having crazy lineages and telling tall tales is somewhat common amongst Indonesian martial artists. It's not an excuse, but maybe an explanation. And for what it's worth, though quality of instruction may vary, the content is Chinese kuntao from Indonesia. No Japanese stuff at all.