Firms swapping info on brokers?

A buddy of mine, or should I say former buddy, confided in me this weekend that he submitted bogus documents on his assets and production when he made the deal to just us at the wirehouse where we both are today. He said he cut and pasted his numbers and increased them up better than 30%. He was proud of himself. He said there's no way our company would ever know. I have my doubts about that, but the larger question is what do I do now?

I'm certainly going to disassociate myself from the guy, since he obviously can't be trusted, but I'm not inclined to tell management. However, if he's ever caught, what will I say if he tells management I knew what he had done? Now I have a completely different view of this guy than I had before and will distance myself from him, but I can‘t help but worry that just knowing this will come back to bite me in the butt someday.