Italian mafia fugitive caught after police spot him on Google Maps
telegraph.co.uk
telegraph.co.uk
I feel like there's another piece to this story that is being hidden.
The Facebook and Google finds are likely both came after whatever the original clue was.
My guess is they are protecting an informant.
Your second theory would only work assuming google is participating in blanket facial recognition with various law enforcement.. which while possible, would be a small scandal if revealed.