I mean no disrespect, but I do think it is very cut and dry.
1)Is the copy he played an original copy, just like any other retail copy?
2)Does he have a valid LIVE Gold(with time on it) account?
3)Is his console modified in any way?
If this 3 questions are answered in a satisfactory manner, then he should not have been banned in the first placed, and definitely should have been unbanned in a timely manner.
If he stole the copy, or killed someone for it, that falls outside of the realm of the Xbox LIVE realm and if you believe this is the case then you follow the standard procedure for this. If he bought it from a store ,the burden of playing a game before release should not fall unto him but unto the store. Much less, should he be "forced" to oust the store with a receipt in order to be reinstated.