I think you are 100% right in your analysis. One thing that strikes me a little is why the price of whether does not fall more that it actually does. If this is a fraud you can lose everything, if it is not al you can win is less than 10%. Who would do this?

I am speculating, but could it be that they use the dollars they actually own to buy back tether sub par? this would increase the dollar per tether value and could finally lead to the 1:1 relationship being restored if the delta between what is there and what is claimed to be there is not too large.