Everytime I have handed in something to the koban it has only taken a few seconds. Then one time I found a Video camera and handed it in. The owners sent me beer tickets.
That guy really got screwed for trying to do the right thing. The copper sounded like a complete wanker. Perhaps he was behind on his stolen bicycle recovery quota.
Also, and if the story is entirely true, the guy is a wuss for letting the cops toy with him like that. Most of what they did (if true) is illegal and they'd be in some sort of doo-doo if he reported them. The fingerprinting bit, for example. Demanding to see his passport when he had his alien registration card. The interrogation. Stopping him repeatedly. That shit wouldn't fly in court unless they had a valid reason to suspect him of committing a crime, and the cops know that.
Sounds a bit like a watered down gaijin gulag story to me.
I ran an old lady over once and the cops started in on me about why I left the scene, and I fired back, "How do you think you got in contact with me at work? I gave her my info, but she didn't want me to call you!"