I don't mean to be cold here, but with firearms ownership comes a responsibility to keep them secure. Circumstances aside, your friend failed to do this. He now needs to get over himself and realize that this mistake affects more than just him.
A lethal weapon could be in the hands of anyone and could harm or kill anyone. His responsibility is now a must. He must report this to the professionals we pay to handle this very dangerous problem!
I will point out also that you, with knowledge of this situation, have a responsibility to force your friend to report this to the police or do it for him.
Well believe me i did tell him when he told me he should tell the police, and like my few posts above i also stated he has done so, but yeah i kinda realized he should of told the police when he told me seeing about a year ago i ended up having to notify the police myself when my own dad came here and stole a Walther P1 i had. I found out later he used it to trade to some dude in down town muncie for a bag of Crack.