For the millionth time, FFP has nothing to do with this. Lampard was a free transfer and Man City has been paying his wages, so they've gained no FFP advantage.
Here's what I believe happened: nobody on the MLS side thought there was any chance that Man City would want FL past the new year, but someone at CFC was smart enough to structure the contract the way it was structured JUST IN CASE (maybe was one of Lampard's people).
MLS allowed it because they must have assumed (like everyone else) that it didn't matter. Remember Man City basically wanted Lampard to ensure they complied with the UEFA 8 locally trained player requirement.
So no, I don't think there was intentional duping -- they likely allowed the initial structure because they thought it could never bite them in the ass. Now, they're caught with their pants down and that's not much they can do about. The mistake wad allowing the original structure and not publicly talking about.
It seems unlikely there was any way to stop what happened from happening once MCFC decided they wanted to keep him.
He looked like shite playing an hour yesterday, by the way...