It sounds like, as opposed to keeping the sats in the Bitcoin-only economy for the long haul, he repatriated them into the fiat economy and, surprise, got caught.

The agencies likely surveiled close friends and family for extravagant fiat purchases after the Bitcoin 'went missing'. Gary got impatient and starting making out-of-place purchases in his name, likely after exchanging the Bitcoin for fiat. 

broadmode

bitcoin

Brother gets caught by FBI/IRS after spending Bitcoin subject to forfeiture.

I'm really curious to know how he get caught, he surely bought thing at his name with the mixed BTC, and was enable to justify the origin of the funds to the IRS. More infos on the "online mixers" he used would be interesting.

Don't you think that lightning with blinded path and other privacy improvements will soon be more suited for illegal activities than on-chain Bitcoin ?