Depends what you mean exactly. It's almost certainly a breach of all of the contracts, unless they were quite sloppily drafted, but it's probably not a crime [1]. The repercussions would be as determined by the contracts — likely just termination.

[1] Not legal advice. It could maybe be fraud depending on the details?

It may be against his contract, but none of the employment contracts I've ever had stipulated that I couldn't hire out my services elsewhere. Why do you think it'd be illegal?

Maybe, which means yes it is legal.

Will anybody come after me? Doubt it's worth it to come after an engineer making 250K and will work at your company for less than 2 years.