It's legal to charge for public domain content. It's not legal to misrepresent your wares to the buyer (fraud, as you said). There is no duty to inform buyers t

It's legal to charge for public domain content. It's not legal to misrepresent your wares to the buyer (fraud, as you said). There is no duty to inform buyers that the thing you're selling is available for free somewhere else, but when you're going around and demanding royalties from people using something that's PD and claiming to have an exclusive right to licensing the image, it's a different ball game. So yeah, just selling it on their website is probably fine, but extorting money out of people who have equal right to use the image is probably not.