Tricky situation.
An I94W, is issued on the plane entering the US, so if he had some issue, then it could have been investigated on entering the US. But then again, it would only have been because he ticked a box and not from INS datamatching.
The bigger problem I think, is he has submitted a DS-156, application for Non-Immigrant Visa and has been declined. Now if he tries to enter the US, without a Visa, he will be pinged. (This will be DataMatched, for sure)
Where to go from here?
I would be seeing a lawyer to construct a letter saying that
the DS-156 was submitted in error, as the arrest doesn't constitute "moral turpitude" in the context of which INS state and giving details.
"false pretenses in obtaining something of value" explaining that there was no intent of keeping the folk lift for monetary value, as it was stupid drunken teenage episode.
(With lots of Blah, Blah and legal jargon) and sending that to US Consulate in Sydney. And waiting for a response.
I'm not sure what else he could do. :?
The assumption is he will never be allowed to enter the US, especially with a rejected Visa application and a "moral turpitude" arrest as it sits now on the application.
Its a pity you didn't post this last week. Us Aussies here in Atlanta had our Australia Day party at Richard Pratt's house, where I was speaking to the Consular General for SE US. Could have asked her what to do
Anyway.... Keep us informed, what happens...