Wait a minute, all the people saying there's no legal recourse. What if you are an artist and you paint something and someone buys it and sells it again representing it as their own work. I don't think it would be a problem if they lady is selling it and admitting that it's someone else's work but she must be claiming it's hers and isn't that where the legality issue comes in?
The most serious legal issue here is the probable gross violations of food regulations as the OP suspects. We are talking about a perishable food commodity here.
This is NOT a work of art that has a reasonable shelf life (as an all-dried-gumpaste sculpture would have). What can be copyrighted is the cake design, the photo image, the recipe, the instructions for special methods. NOT the physical cake itself.
The OP could lose her business license and be fined, and various other nasty consequences could arise as a result of this illegal activity. She needs to take all steps necessary to protect her business and the customers. Identifying the actual maker of the cake under the cakeboard is one way to stop this evil person from her evil ways.
Selling food from an unlicensed establishment can make a lot of people sick. That kind of action makes me sick to my stomach everytime I read about it. My neighbours are still not buying beef some months after gross contamination in one packing plant, even though the inspection sticker clearly shows that the beef in the store is coming from a different plan altogether.
