Other mistake: This episode has four teenagers beat a contemporary to death with hammers, following a practice session with a pile of water melons. The boy is beaten to death sometime during the weekend, - probably on the Saturday.Prior to that is the practice session with the melons, which must be the Friday evening at the latest. The room with the melons is searched on a school day, Monday at the earliest. Yet the melons, in all that Nevada heat after lying around for three days, are still fresh looking, and there are no flies or other insects swarming over the juicy remains.
Continuity mistake: Nick counts the bullet holes in the rabbit sign used for target practice and says there are only 9 holes. It shows a flashback to the guy shooting and he shoots a tenth hole in the sign near the rabbit's right arm. This hole is not shown on the sign Nick looks at.
Answer: He doesn't have the authority to arrest him - when anyone is arrested in the show, a police officer does it. Also he tells Ty that he is going to be submitting his case findings to Ty's insurance company, who would no doubt contact the IRS, who then would have him arrested for fraud etc.