Grant fraud, should I bust my PhD advisor?
TLDR: You need a lawyer.



I think, ethically, speaking out is the right thing. Falsifying grants is despicable and has a very negative impact on science in general. It has happened to me multiple times that when I say in a pub that I am in science and that I got a grant people say things like "All those grants are just frauds to get money from the government/EU". I don't think I need to explain why this kind of perception hurts on both personal and systemic level.

Regarding your own well being, things are much more difficult. The fact is that you have willingly participated in a non-trivial fraud for a prolonged period of time. Speaking out will not erase this neither ethically nor legally.

You need to consult a lawyer (not an Internet law advice, a real lawyer). As pointed out in the comments - you may easily be considered a part of the fraud. You may want to check your country's whistleblower/cooperating defendant protection laws, but those (if existent) usually do not provide any strict protection - court will have to decide whether you will face charges. OTOH, if the scheme is revealed later without your involvement, you will be in much worse situation than if you had spoken.
You may also claim to have acted in good faith or under serious threat (losing employment). Once again, a lawyer should be able to tell you to what extent this may protect you under the relevant jurisdiction, given the specific circumstances (there is no simple general rule).

Be aware, that you are in trouble. I don't think there are so many grants of this kind and much fewer of them are being cheated like the one you speak about. There is a non-negligible chance that someone overseeing the project reads this post and may consider checking whether this isn't "his" project. Some other participant of the grant may read this as well and consider speaking out himself to get into a better situation. And as this sounds like a big and ongoing fraud, it may easily burst on its own - once people get too much used to bending rules they usually do not know when to stop.

This is not a "we used a questionable accounting trick to be able to buy a new device we really needed for research" kind of problem, there is no good intent, neither was the money used in the spirit of the grant.

EDIT: One more bad scenario in response to some of the comments. Let's suppose the fraud is exposed. Even if the funding agency does not initiate a criminal investigation and even if they cannot directly claim money from you (as your contract is probably with the uni) you still have trouble. Since the uni will likely have to return a large sum of money, they can file civil suit against the people involved in the fraud seeking financial compensation for the loss. As you have made false statements about accommodation and other stuff, this can easily include you.

EDIT 2: I would like to highlight a good point made in AndrejaKo's answer: If the corruption is sufficiently deep in the system, it might not be actually possible to bust your advisor (read the answer for detailed reasoning).