Judging by the way that initial post was written; I am getting the impression that the school took advantage of a non-native speaking university student, being told to lie and say that she's American is a red flag, it suggests that she's a white European lady, possibly Russian or Ukranian. I would warn all people who hail from just about anywhere in Eastern Europe to be rather wary of Chinese employers right now.

I'm really sorry to say this but, many nasty, dishonest, corrupt Chinese employers currently consider you guys to be their preferred, gullible, easy targets. They believe that you will have less knowledge of your legal rights, will be far less demanding as far as pay and living conditions are concerned due to the declining economic situation back home and most importantly for them, you are most likely to be white and therefore less likely to set alarm bells ringing than an African native speaker from say; Ghana or Nigeria.

This is unfortunately a side effect of native speaking teaching teachers becoming increasingly aware of problems in the Chinese ESL industry and less willing to take shit from employers, combined with increasingly strict work permit requirements and a struggling Chinese economy; schools would rather risk employing Eastern Europeans illegally than go through all the effort and expense of employing a native speaker legally. Even if you are an absolutely wonderful and amazing teacher, the sad fact is that you are probably being used and abused.

She's probably going to get deported but hopefully they will be relatively lenient and forgiving due to her age and circumstances. She simply won't be able to get the work permit whilst in the country on a different visa; in the best case scenario, the police may be allowing her to get the work permit applied for and voluntarily fly home to apply for a work visa, but she usually can't convert it in China, especially not these days.
Besides, she has no degree.

That 'medical' should be conducted at the appropriate designated centre, if it's at the police station, she's probably getting drug tested and having DNA samples taken. Ultimately meaning that she's on record and probably screwed.

Just name and shame them, if they were willing to employ a teacher illegally, they're a shit employer, simple as.