Should I provide a fabricated reference for a friend?
Don’t do this. It’s bad for the industry, bad for the person who eventually hires him, and extremely bad for your good name if you’re found out. I feel certain that if this person weren’t a friend of yours and if you didn’t really believe in him that this would be clearer to you. Try an exercise: imagine doing this for someone whom you knew to be a liar and a fabricator of false stories about his experience and training. Someone whom you didn’t respect. Now imagine that everyone who could possibly hire you in the future found out that you had done this. Would you be proud of this? Since you honestly support your friend’s job hunt, offer to write him a letter of reference that is honest and supportive. Writing a reference reflects just as much on you as it does on the person you’re trying to support. Keep this in mind as you proceed.
Don’t go there. It’s too easy to find out that things like this have been done. A blown coverup (and it will be blown) does more damage to all concerned than disclosure could ever do. You should offer everything you’ve said here, except the parts about wondering whether to lie for your friend, as a personal reference.
The lack of anonymity in replying is going to skew the answers you’re going to get in favour of those against. Very few people are going to pop in to say “Oh, yeah, I do the fake reference thing for my friends whenever they ask.” I will say that this is far, far less rare than you might imagine. By definition, this sort of thing runs under the radar but it is done all the time.