I'm not really surprised to hear this though. When I first started going to Bitcoin related meetups in 2013 (there was really only Bitcoin and a few crap-coins back then) there were always shady men (and women) showing up saying they had tens of thousands of dollars in their car and would like to buy somem Bitcoins with it. They were very clearly doing it to either launder money or for tax avoidance.
I do find it interesting that this guy was selling Bitcoin which seems like the lessor side of money laundering - but maybe they just went after him because they couldn't trace the buyer - who is probably hiding out in Crypto Utopia right now. Or maybe he was someone who was paid in Bitcoin for illicit goods or services and was using p2p transactions to cash out his illicit gains (tax free). Let's not forget that tax avoidance is an easy way for governments to get criminals when they can't get hard evidence on actual crimes.
So who know what the whole story is here but I really doubt he's just some innocent person who did a LocalBitcoins transaction for $100 because they were sick of waiting for Coinbase to approve their account and things went bad. Let's watch this space...