Happened at our school and the coach was fired and forced to payback the money. If the coach is charging his own players for lessons, go to the AD with proof and let him know. A pretty slimy thing to do, edging out kickback from showcases and booster club donations for new equipment that never shows up. Charging extra for something they're already getting paid to do is wild.
If a coach wants to profit off his players at least start a club team and don't be so blatant about it.