I’m not a lawyer but in this case that guy’s data getting sent to DoJ doesn’t really bother me...
Data should be protected just like the intel you are giving to your lawyer or your doctors. There is absolutely no reason a government should be able to simply catch your data without a reasonable cause.
Knowing someone is NOT a reasonable cause. If they had proof that he did something that's a different story, but then they'd just catch him wouldn't they?
I believe what you're describing is the way the Prohibition-era gangs were broken up. It's a long-standing policy that this is acceptable policing in the US; it's not generally considered a fishing expedition if police investigate a person who associates frequently with a person they're building a criminal case on.