Any possibility he might be a decoy?
I'm not sure how sketch your school is and how serious the "investigation" may be, but according to the information you gave us he doesn't seem like a normal kid. That being said, he's not too smart and he must know his cover is blown. I would think a police investigation like that isn't just to fish some petty felonies out, it kinda seems like there might be something going on there that you don't know about.
It would make sense for them to send someone in that's a bit obvious to get everyone concentrated on him and have another person, the real narc, doing his thing in the back. At least that's what I would do.
If what I said right now is true though, your problems might be deeper than you think. Not only will weeding out the real narc will be near impossible, messing with the decoy might put you on the "suspicious" list even though you have nothing to do with it, since you would be interfering with their investigation.
I say stay away from it dude, it sounds kinda weird.