It's entirely possible for short sellers to have legally borrowed more stock than is actually outstanding. There is no evidence that I've seen that they've done so illegally.
Can you explain how it's possible to borrow more stock than is outstanding?
I have one stock in GME, and borrow it to you. You then sell it on the market to somebody. That somebody can subsequently borrow it again to a short seller who will again sell it on the market. Repeat.
If a shorter lends his one borrowed stock to another shorter there will be a chain of shorters for the one stock. Isn't that what happened?