I think this is absolutely disgraceful.
I sort of agree with turbofan. If he is tagged with a chip and still hasn't been found, I am betting the dog is no longer alive. I think at this point the friend would be better off owning up to it, though.
I have read other stories before about people who were asked to care for things while soldiers were deployed - they expected the person to be killed in action and squandered, sold, or simply let slide very important things and the soldiers returned to even worse devastation at home.
My thoughts and prayers are with this guy that he is reunited with his dog.