Is my boss breaking the law?

I work for a small privately owned company. I have only been there for about 3 and a half months but I am increasingly uncomfortable with the situation there. Basically we have clients who pay a lot of money for us to provide a marketing service to them. The clients' contract is for a year but they pay monthly. Our business partners in another state sell the program and then our office is responsible for delivering. The product we are supposed to deliver is in the form of marketing events, anywhere from 24 to 96 in a year. At first I was just doing administrative and clerical work but now I am directly involved in client relations and customer service. Basically my boss is not booking events but is telling the clients she is. Then when it comes down to the day before said event she has me scramble to try to book something last minute. She is having me write detailed schedules to our clients stating events are booked when they aren't. She even gives them specific locations or tells me to just pick a random location and tell them that's where it is. Then when we can't book an event last minute, she tells me to lie to them and say its just rescheduled for another day, which is just another lie to cover up the first one. Some clients have been told this 4 weeks in a row. A few clients have become fed up and demanded refunds. When they have to refund someone they use the money from the new clients' payments to pay back the original clients. Our business partner who is selling the program is being lied to as well. I don't know him well but I do know that he has an impeccable reputation in our field. My boss is telling him that all of our 100 or so clients have events booked when they don't. When clients call him unhappy she somehow convinces him that it is his sales reps' fault that there are any problems. She even had his top sales rep fired and tries to justify the lying to me by saying that guy put us in this situation. When I started I thought it was weird that she didn't seem to spend any time booking events for the clients. She takes 3 hour lunches and sometimes just doesn't come to work. Sometimes she shows up at 4 in the afternoon. She continually tells me to lie and lie to the clients to keep them "happy". When I finally tried to express my discomfort with lying to our clients, she demoted me. She had given me 2 raises since I started for being dedicated and putting in 45 and 50 hour weeks. She now said since I don't "want to do what the job entails" she won't make me talk to the clients and I can just do administrative stuff again but I will get paid what I originally started at. The thing is I love my clients and enjoy talking to them and would love to do everything the job entailed so long as I didn't feel it was completely unethical. I feel like we're scamming them! I also enjoy booking events and I'm very good and successful at it but its not the kind of thing you can book 8 clients for on the next day! It requires building relationships and getting approvals and going back and forth with info about what it is etc. At this point I've booked more events than her. She also makes claims when selling us/booking events (and tells me to as well) that I'm starting to think aren't true. These are claims involving federal and state mandates and claims of affiliation with organizations and state offices that I'm not sure she really has. I need advice!!!!