Unsafe Electrical Outlet?

While viewing a REO listing this weekend I found this rather unusual (and humorous) recessed outlet setup in a kitchen.

This may be a little difficult to see but here's what is in place. Thick tile was added over the original wall surface, causing the outlets to be recessed too deeply to be usable. The "genius" tile worker then pressed two ground lift adapters (AKA 3-prong adapters) into the outlet and then tiled and grouted around them to finish the permanent installation. Could this be a fire hazard? Probably. Is it up to code? Not likely!

This is a good example of why buyer's need competent home inspection while in the contingency time frame. This could likely have been passed over during a cursory walk through by the buyers but would definately be red-flagged by an inspector.