"I said, 'Around $20,000,'" he recalled. "Then, at the point, he said, 'Do you mind if I search your vehicle?' I said, 'No, I don't mind.' I certainly didn't feel I was doing anything wrong. It was my money."
First mistake was when the officer asked if he was carrying a large amount of cash. The answer should have been "no".
Second mistake was when the officer asked if he could have permission to search the car. The answer should have been "no".
Third mistake, don't assume the officer agrees that you are not doing anything wrong. Do not offer anything. Anything you say can and will be used against you, or in this case, to take the guys cash.
Strongly disagree. They could nail him for 'obstructing justice'(or somesuch), which would give them a bargaining chip - 'You just forget about the money, and we'll forget that you lied to a police officer.'