insurance is useless. it only covers:
(a) item lost - tracking number has to show "arrived at so and so facility" and that is the last update on the tracking number. than they will search the facility and if they can't find it, than they will refund. (b) if someone from the post office steals item out of box - impossible to prove. even if seller said he put item in box and buyer said empty box, they would just say either seller or buyer is lying. so if he does get a police report saying he got an empty box, I can't file a claim w/ post office for insurance (even if i got it) because post office would say, no, you mailed an empty box. (c) damaged - box has to show signs of damage (this box doesn't), and usually these are notated by the post office before delivery. ex. side of box ripped and something could of fallen out. or something struck the box and put a hole in it and damaged something, etc. if box doesn't show damage and the item is damaged, than post office denies the claim and will say you didn't pack properly.
post office could of took the hat and re-taped but as i stated before tampering with US mail is a felony. Prison time, $250k fine, etc. Pretty much if you wanted to steal this hat and worked at the post office, you wouldn't steal it from the mail. Same thing with if you wanted to rob someone, you wouldn't rob a cop. Judges are NOT nice when people shoot cops (seen as good guys helping ppl, etc.) and you will get a bigger sentence if you shoot a cop. And again, no insurance = so noone knew it was a $500 hat. Maybe 1 out of 100,000 actually know don c hats and know it's worth $500, etc. Trust me, this outcome is already dismissed.
I really hope he attempts to get a police report, because they will take a deep look at it. Find it odd that that every inch of this box is taped and layers of it. Find the label peeled off and re-attached. Find 15 oz on the shipping weight. They will even consider small things like how the bottom of the box is cut and not the top. Usually with boxes with top or bottom openings, most people cut the top because they assume it's facing up.
It might be helpful to go back and read through some of the other posts in this thread. I know that this may be a stressful situation, but a lot of members have provided some different options for how to proceed with this (as well as questions that will help us give you better advice). Without you trying some of these out / giving us more info, there are not a lot of other ways that we have to help.