Ok, blimey!
There is no other side, then! Publicly hanging someone on the say-so of one other person has always been such a good way to administer justice, hasn’t it?
Anyhow, I do believe you. In this case the organisers need to MTFU. They have been put in a tight situation by their own cock up, but massively exacerbated by the dishonest actions of another person.
They should sort this. Firstly they should sort your friend so that she feels like she has got her just rewards. Then they should take whatever action they see fit against the other party.
It is stuff like this that means at future events competitors will either have to sign an agreement stating they must give back any prizes wrongly awarded, or be left standing around for hours whilst results are checked and double checked.
Another classic example of the few spoiling it for the many.
I really hope your friend gets it sorted. But much, much more importantly, I hope your friend hasn’t had her desire to compete dented by this.