Do virtual particles take energy from the fabric space and when they annihilate in the split second they distribute that energy back to space, therefore abiding by the law for the conservation of energy?
When you include interactions, "empty space" defined as a space absent of particles, is not actually an energy eigenstate. That means that the universe in that case does not have a definite energy. This state can then evolve, through mechanisms similar to optical squeezing, with particle-antiparticle pairs forming and disappearing, but with the expectation value of the energy $\langle \Psi | H |\Psi\rangle$ staying constant.
So no: no violation of energy conservation (but it might misleadingly look like it in the basis of the free Hamiltonian, for very short times $t\ll\hbar/m c^2$).