I don't get the purpose of the flag. Is it for sockpuppeting? Or for plagiarism? Doesn't sound like a proper use of the flag system.
Obvious merit farming. Using deception to obtain merit under fraudulent pretenses.
How is that "a high risk of losing money"? Merit is not money.
It is the deception that in my eyes triggered the flag. The merit he received will allow him to potentially appear more competent than otherwise and will allow him to potentially earn money from having that merit (this is not assuming he sells it he could earn money without selling the merit).