If you keep it that would be fraud and they could sue you in small claims court. And there's a potential for criminal charges.
If it's lost, stolen or broken, that could be a bit tricky. Normally they can't sue you for that type of thing. Example, if your driving the company car you don't become responsible for repairs. But this sounds like a questionable company, so they probably had you sign something that says your responsible.
I'm going to guess that a judge will rule that they can't charge you, because they're contract is illegal. But I'm really guessing here
It would be up to them to take you to court. And even in small claims court they'd have to pay someone's wage to be there. So if it's accidentally broken, they probably won't bother. If they think you stole it, I'm sure they will sue you.