You're right in that baiting the scammer to send cash is a scam in its own right. Granted on a much smaller scale. I don't think this con man will send any cash. What he will do is send more e-mails, carefully tweaking his story.
Alveraz doesn't have any intention of cashing the check. He already knows that the check isn't any good and cashing the check will take money out of his pocket. And yes the police will shoot first and ask questions later. "Ooops, this guy was the victim not the suspect", "Hey you got any more bullets? I ran out of bullets".The scam works by making YOU cash a forged check not them.