If I totaly lie about my work experience when applying to business
school, and make up jobs that I never had and write about them, what
are my chances of getting busted? Can schools look at tax records?
credit reports? Do they call the company? If I get busted will I get
thrown out? prosecuted? Has anyone ever been busted for such an
offense and what happened to them?

Not a good idea. You will inevitably get caught sooner or later and
there will be serious consequences.

College rejects applicants for lying
http://www.findarticles.com/p/articles/mi_qa3835/is_200307/ai_n9252141

MBA Essay Writing Tips & Strategies
http://www.ivyleagueadmission.com/buswritingtutorial.html
9. Don't lie or exaggerate. Applicants seldom realize how easy it is
to detect lies and half-truths in admissions essays. Don't pretend to
be someone you are not. After reading your file, committee members
have an excellent "feel" for your character and can tell when a
reported event or achievement isn't consistent with the rest of your
history. Lying is a fatal mistake. A single misrepresentation on your
application will lead us to doubt all of your other assertions.

Put Your Best Foot Forward.. And Make Sure it's Your Foot.
http://www.accepted.com/newsletter/2000/0400news.aspx
Well Cynic, the chances of discovery are low, but not non-existent.
Furthermore, the consequences are devastating ? far worse than
acceptance at a lower ranked school. I personally know of a corporate
officer who was forced to resign from his company after a twenty-year,
stellar career when someone disclosed to his bosses that a claimed
college achievement had never happened.

Czh-ga is a G-A Researcher with professional experience in job
placement and consulting.  Take the advice.  The websites only
reinforce a professional's insight.