Did you actually have a question you needed help with or did you come into the SJ guardhouse just to bitch about ISFJs?...
Do ISFJs lie sometimes?
Yes, but I can't imagine them doing it compulsively at work like you describe. That is impractical.
Do ISFJs make good managers of companies?
I think some could depending on the nature of the company. It wouldn't be my job of choice though unless I owned the company.
Should you blow the whistle?
Yes. I think management needs to hear from you, or else they could explain to you what's going on.
I'll also throw in that other types know how to follow employment regulations besides SJs.