Oh, I forgot to mention. If he is truly an independent contractor/sub-contractor, he would not be eligible for unemployment benefits.

Er... yes & no.

I agree he isn't entitled to any unemployment insurance from his work at the OP's business because he wasn't working for them.

However, as I said, the sub-contractor might fire him for being a thief and the thief might then try to appeal if denied unemployment from the sub-contractor's account. (States do these things differently and have different names etc. so my wording may not fit your state although the meanings are probably similar.

The subcontractor may lay him off or fire him because of this. He may go to the state to complain of "unfair termination" to get unemployment insurance. Be willing to go to the hearing (not a court thing) with the pictures and witness statements and back up your subcontractor.