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He got a pretty stiff warning that selling to non-collectors could result in revocation of the license, but that was all. That was in VA.
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I don't understand how he could get such a warning in VA, as long as he sold it to another legal VA resident and logged all info in his bound book (unless BATFE agent is FOS, totally possible). He could not lose his C&R for selling to non-collectors, unless his book indicated that he is abusing his license for profit versus improving his collection. I've sold C&R rifles and a C&R handgun that I didn't need for my collection any more (got better ones). The individuals I sold them to are VA residents and can lawfully own them here. What they do with them is their business.