Yeah, I'm sure there would be loads of fraud. That would take another whole government department to deal with. I wonder if your idea is anything similar to the movie Into the Wild. If I remember correctly, the guy burns all his document. Then later, for some reason he decides he needs some document. He comes to a homeless shelter in California and real quick they did him up some new documents just based on what he said. I wonder why illegal immigrants don't do that. Well, I guess some of them probably do, we just don't think they're illegal immigrants. Haha!
You have to understand that the welfare fraud which is present now is probably a lot more prevalent then it could be if UBI is present. Because with the current welfare system, if you fake your income levels (or something along these lines) you're going to be allowed to get welfare.
UBI is a system which gives to all (maybe capped out a certain point, but still) and avoids the tediousness of having to screen mass amounts of people.