Upload & Sell: Off
There's money that can be made with buying and selling electronics, for sure. I, myself, have made a few Ben's buying/selling on CL then FM and vice-versa. This guy could be on the up and up, as others have said. It's hard to tell, and I echo what others have said, be careful going to the police too soon.
If you really want to figure out if he is a legit seller, then I recommend taking a good look at his prices for the used gear he sells. Then, compare his prices to other used prices in different resell arenas, like: eBay, Amazon, FM, CL. Consider that eBay and Amazon both charge a commission, plus sellers recognize a risk to selling online; for this reason, eBay and Amazon prices should typically be >10% higher than CL or FM. Also note that FM prices for a particular item, on average, are usually spot on for what the item is worth at minimum. (That's what I've found.)
For example, if he is selling a Canon 5D mark III with 25k actuations for $2000 cash and the same item typically sells on FM for $2600, then do some more investigation to find if other items are being sold at drastically reduced prices, prices from which a normal person could never profit. I think you could investigate thoroughly, by doing analysis of his selling trends, to better determine if it is likely legitimate or likely illegal. If it is likely illegal, and you can show the results, e.g. he is selling below 30% of standard *net* used prices, then you could show that to the authorities. I also would presume him innocent, and would try to protect his reputation - by not disclosing it to the authorities, unless absolutely necessary. Maybe he's really good at his job. Maybe not. But, if you want to find out more, I recommend passively researching this guy's business. I'm willing to bet you will learn some good stuff about buying-and-selling in the process. Maybe you will uncover a criminal. Maybe you will find the next best entrepreneur.
That's just my advice. Please, take it with salt. I'm no professional or expert - just a student. I do hope it helps.
Peace and good luck.