Are illegal charters less safe? Well - answer is, "we don't know".
As pointed out previously, an illegal charter flown by a well-trained, well rested and disciplined crew can be extremely safe, and a commercial charter flown by a bunch of undisciplined muppets not safe at all.
Comes down to probability. We all know the commercial operators that we cannot understand are still flying - but sooner or later, their number is up, and they will be forced to reform or shut up shop. The regulatory oversight gives you an increased probability that your flight is being operated in a safe manner. If you seek out the larger operators, your chances improve - size draws scrutiny, and you are not sailing close to the financial margins all the time. A 3-aircraft outfit with KAs and Citations - less so, margins are tighter, and the incentive to cut corners greater - if it works, you make money, if it doesn't, you 'only' lose the AOC of a small operator and can rebuild elsewhere.
Not tarring everyone with the same brush - I am talking probability here. Both when it comes to choosing the cheap illegal over the more expensive AOC charter, and choosing a larger operator over a smaller operator. There are no guarantees - but if in doubt, use audited operators - Wyvern/ARGUS - then at least you know someone independent has had a look.
The idea that auditing and procedures only generate paper and puts the crews under pressure.... well, if you take it as a paperwork exercise, that's what you get. If you take it as a genuine chance to improve (and get your CEO onboard that wagon) - guess what, that's what you get. It's what you make of it, and it sure as hell ain't going away, so moaning about it says more about the operator than it says about the system.