How else would you know which one is the criminal?

Once you start processing the credit/criminal, the money is spent, and you can't get it back.

However, if that effort fails, the local agent is equally liable – criminally and civilly – for any fees, fines, etc. associated with the property." 

Coghill they are trying to take care of several things:1) Approval to access credit reportsA video tour of my home office (required by the credit repository to show security, so access to office & computers is limited to avoid data theft)Credit checks on me and my partner (required by the credit repository to make sure you are not criminals looking to steal others' data)Copies of the deeds for every property we own (required by the credit repository to confirm you aren't just self-serving)A copy of my partner’s home lease and utility bills (required by the credit repository to prove his legal address, so they can pursue him criminally if he steals data)Business phone bills (required by the credit repository to prove an actual business)2) Approval to use banking ACH system to accept tenant payments and pay ownersBusiness phone bills (required by banking industry to prove business legitimacy)A signed letter from the bank verifying our accounts (to prove legitimate business banking accounts.

I would pursue it civilly and try to get them to pursue criminally. 

I'd venture to guess your tenant is a criminal or drug addict of some sort.There's some truth in your thought but he's actually a really nice hard working young man. 

Put a lien on the property(s) they own, this is needed by some court action (i.e. lawsuit in civil/criminal court) 

Criminal background will weed out some bad actors as well.  

Non-compliance can result in penalties up to $500 per day and potential criminal charges.

That is where the concern would be for me.Yeah, older tenants may think that it automatically makes someone a criminal of something, but I would just explain the card and that it at least, in theory, has a medical purpose, unlike cigarette smoke which kills the smokers and everyone else around.