I suspect the bank reports these electronically from a data base of all suspicious accounts, could be wrong but I doubt the image of gleeful or coourageous bank officers is accurate. Just mindless compliance activity.
You are probably right as far as the bank goes, but you can bet someone, somewhere along the line, saw his name sandwiched in among all the others and went “BINGO”! The IRS doesn't have the time or resources to look into everyone who buys expensive hookers and pays like he did.