The problem is the strike threshold for a 3.0 is way too high such that the player could win at 3.5 and not get 3-strike DQ'd, thus allowing them to go back and play 3.0.
After the drop from 3.5 (where he was winning) to 3.0 (where he dominated, losing 0 games in several matches) his dynamic rating is 3.6 to 3.7 ish (per tennis record).
Mind you that the captain running both 3.5 and 3.0 teams (both have the same name) instructed him to drop down to the 3.0 singles team with two matches left in the season. This was done successfully, as the offending team narrowly defeated another team by starting the offending player in both of the final matches (where he dominated, losing 0 games).
Relevant here is also the fact that the offending player admitted the captain recruited him, that he thinks he really is a 3.5 player, and that the entire scenario "lacked integrity." Mind you the captain doesn't play on teams, just recruits players and runs 3.0 to 4.0 teams for some weird form of self gratification.
Ideally, if the USTA was put on notice of the captain and player conduct here, they would closely monitor any self-rated player joining teams run by the offending captain.
Unquestionably, once the USTA is aware of the conduct of the captain, it has a duty, likely under consumer protection laws, to issue a formal notice to the offending captain that any future conduct that is similar to this instance would result in a lifetime ban from the USTA.