I guess it could be a moral versus legal answer.
If the question is HAVE YOU EVER BEEN ARRESTED - then the answer is TRUTHFULLY YES - even if things have been expunged. Sounds like an excellent question for a labor / contract attorney in your home state or in the state with which the hiring airline runs its' operations.
He is right about the airlines finding out something and possibly firing halfway through training and now having that type of dismissal on his records.
There are NUMEROUS threads on APC which over your questions in detail.
It seems to be quite the common occurrence.

USMCFLYR