Shock Waves - S11-E1
Revealing mistake: When the bomber is shot in front of the store, he is standing in front of a shop window. It's highly unlikely that the window wouldn't get hit and shatter. The cops fire at least a couple of dozen rounds, and magically they all hit the body, nobody misses in the heat of the moment, and no bullets exit the body from the back.
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.