You're a liar or your friend is a piss poor lawyer. This guy has done nothing to be placed in jail.
There are many case precedents beyond fair use that defends artists, but of course your friend should have explained this to you. Again,
I am not a lawyer, but I know this much. This has been tried in courts for everything from fan paintings being sold to OOAK Barbies. Companies don't pursue this crap due to the fact that
its not as black and white as you (or your "lawyer" pal ) seem to think it is. Fan art is a hard subject for legal scholars (ie original works); resold toys with modifications are in a league of their own. "Well, your honor, he cut up a toy he bought off of us and resold it..." LOL, your lawyer friend sell fries with that? Cause again wtf is a copyrite lawyer?
Yes! If they sent him a cease and desist and he continued then hes wrecking most of the defense he would have. Again, that still doesn't place him in league with bootleggers.