Something wrong there - convictions are what counts. Arrests cannot - you could be arrested for murder 5 minutes from now, and then be proven innocent in a court of law. No foul.
If this info about your friend is true, he needs to get an attorney, and a copy of the record showing charges dropped or dismissed. If he was convicted, or pled guilty to a lesser charge involving no jailtime, yet still punishable by more than one year in prison, he's done. If not, someone somewhere is doing things illegally....
I am not a lawyer, nor do I play one on TV.