"He said he would prefer to go through an FFL. His reasoning is "so he know the gun isn't stolen and he knows he isnt selling to a felon"
If he expects to find out if the gun is stolen at the time of ffl transfer, he will be disappointed. 2 ways to do a transfer in AZ: 1) if the buyer has a CCW, he fills out the paperwork, shows a valid DL and CCW and pays his fee 2) the dealer makes a call to Nics and provides buyer information to Nics, name, address, ssn, dob, type of firearm, etc. We are told proceed, hold or decline. At no time is a serial number or brand of firearm provided to Nics. So, determining whether a firearm is stolen just will not happen at background check time. It can be determined by an ultimate owner when a trace is done on a firearm, but that's another topic.
Also, a buyer can be declined for many reasons other than have a felony on his record: domestic violence misdemeanor, stolen identity, health records or just plan errors on the Nics parts.
We had a guy buy a $3000 Colt of some sort about 5 years ago and he was declined. Clean cut guy, business owner, he was livid. We give him the number to call and talk to Nics about the decline. Turns out his dirtbag son in prison had stolen his identify and was doing credit card fraud out of prison. The guy had a warrant out on him because of his sons actions. He had to go through the whole process of getting a Upin for the transfer and it took additional months to clear up his identity. I ask people to get a CCW when they show up with a drivers license in hand and avoid the Nics lottery background check system. Too many don't bother and then wonder they are held or declined.