Deception or misrepresentation of a wire transfer or forging or manipulating documentation of a wire transfer is a felony, and not reporting it to the authorities makes you potentially complicit. It is in your best interest and that of your friends to be aware so they can make good judgments about what to do next.
As to what he was thinking when he did this, he is a typical psychopath. He likely wasnt thinking very hard. Fortunately the vast majority of psychopaths present as lower than average intelligence. Movies tend to misrepresent them. They may be charming and charismatic however most are not very bright or less so than average. Evidence suggest is a deeply neurological disorder with MRI scans suggesting underdeveloped or damaged parts of the brain. One might conjecture that this damage if you will tends to affect intelligence.
The scariest thing of all though is a highly intelligent psychopath can cause immeasurable harm and suffering, so fortunately people like that are rare. Think Bernie Madoff.