Continuity mistake: When Nick is staring intently at the doctors lapel area, the camera zooms in and we see some lint on the doctors left lapel. When Nick asks Catherine to get the tape on it, Catherine approaches the suspect and she starts to put the tape on the left lapel, but when the camera zooms in for a close-up of her getting the lint, the tape is being applied to the RIGHT lapel.
Continuity mistake: Nick is eating a hot dog when he's handed a warrant. Depending on the camera angle, he goes from taking a bite out of the hot dog to holding the hot dog in one hand and the warrant in the other simply with camera angle changes.
Answer: He doesn't have the authority to arrest him - when anyone is arrested in the show, a police officer does it. Also he tells Ty that he is going to be submitting his case findings to Ty's insurance company, who would no doubt contact the IRS, who then would have him arrested for fraud etc.