All Immigation officers in ALL countries have the right to deny ANYONE into their own country.
Criminal activity is definetly one, but an often overlooked reason for denial is "lack of ties to home country".
This usually happens crossing the US border, but has been known to happen in Canada and the UK. It is up to the Immigration Officers to decide whether or not someone seems suspicious and has sufficient ties to their own country. All visitors to any country must have proof of these ties.
MOST of the time, a return ticket on a short (3-5 days) doesn't raise any flags. Same with purpose of the trip.
Visitors to foreign countries are also suppose tro prove they have enough money to support themselves during the trip. It all depends on how long the trip is.
When I cross the US/Canada border, I usually take 60-100 dollars, and even sometimes the officers tell me that isn't enough, but I also tell them I have a credit card. I crossed one time saying I only have 5 bucks and a credit card, and that was to an Immigration Officer and not a CP Border Control guard who you deal with when you cross land borders.
Red Flags for Immigration officers include - no return ticket, a long trip,no job to return to, not owning a house, not being enrolled in a school, not having an apartment lease, not having any obligatory bills like phone/cable.. mostly they are looking to see if they have ANY reason to go back to their country.
Hopefully that helps...kinda hard to tell what it was without the whole story (ie what they really asked your brother, what your brother told them, how long he was staying, who he said he was meeting, etc).
Edit: Oh a question.. How were they suppose to take pictures if he hadn't actually made it over the border? That sounds suspicious to me. Why do they need to take photos together...?
Also..he may be flagged now. So even if he crossed the border by bus, he's still going to be questioned by immigration and they will see he already has a record. They may give him a hard time because it has happened once, unless he has proof that he is coming back.
If he was visiting a friend, he just should have said friend. If he lied about who he was seeing or the purpose of the trip, you can be barred from crossing the border for 5-10 years.
Just wanted to add; according to Immigration Officials, anyone visiting is required to show sufficient ties to their own country..but only when they suspect you will they actually start questioning/asking for proof. Most of the time people are not asked anything more than purpose of their visit and length of stay. I personally always take documentation with me.
Also... curious why he didn't get pre-clearance from the US airport before he departed. At most Canadian airports, we have US Immigration Pre-Clearance. I've never had to be cleared after I flew.