Most banks have automated systems that flag on certain automated conditions (I know because I built one). Contrary to some of the posts in here, they do not want to flag accounts, and most do the absolutely minimal mandated under AML legislation.

We have no idea why his account was closed, but it is extremely unlikely it was due to suspected money laundering. If they suspect money laundering, they legally must report it (this is the case in the US, Canada, and the UK, at a minimum) to the appropriate government agency, where it will be investigated. They can't simply say "looks like money laundering, go somewhere else".

As always everyone is operating under very incomplete information.