Anyone know anything about expungements and dismissed cases with NO conviction?

What your friend did was plead guilty to a lesser charge and get sentenced to probation. If the charges had been dropped altogether for his giving the stuff back, he could not have been sentenced to any probation at all. Expungements are granted for convictions, upon completion of probation and petition for expungement, at the discretion of the court. This removes the record of conviction, but not necessarily the record of arrest. Arrest records are NOT public records, so a normal background check by a private company will not find them. Some States will not reveal arrest records to out-of-State law enforcement either, but some do. If he gets arrested in, say, Wisconsin, for, say, theft, the cops there will find his Minnesota arrest for petty theft with no conviction. I know of no way to expunge an arrest record.