Frey's uncalled-for histrionics at Dream Ed's client school in the Donggguan area have caused a lot of needless trouble. But actually it's just turned out to be a storm in a teacup.
Frey will get his stuff back and the money owed to him as soon as he comes out of his self-imposed hiding. So, there's no need for other staff at Dream Ed to be implicated in minor visa irregularities by an unnecessary official investigation instigated by you.
Actually, what's already been done can not be undone. But Frey and some of his foreign colleagues have a lot to lose if immigration gets involved. So,I think it would be wise of you to inform your Chinese friend in high places to drop the matter.