His work visa - or any visa or future entry to the U.S. - can be denied if he lies on the forms and this is discovered. A finding of fraud would likely cripple any future attempt to enter the U.S. He definitely shouldn't lie on the forms, regardless of whether they can pull up work history through the computer.
Again, my point was that this is an L-1 visa he is requesting, which permits work and does not require nonimmigrant intent. The problems arising from his overstay would be that the consulate might think - since when he was here on a visitor visa he overstayed and then worked without authorization - that he doesn't want to just visit and that he might want to work.
SO WHAT if he might not just be visiting? The L-1 visa allows dual intent - the intent to enter temporarily for the purpose of the visa while at the same time wanted to pursue staying permanently.
SO WHAT if he wants to work? The L-1 permits the holder to work for the sponsoring employer.
What I'm saying is that the concerns that would normally arise from his previous actions are not concerns for purposes of the L-1 - only if he was trying to come in as a visitor or student or something of that nature.
Admitting what happened on the forms won't get him into any trouble. NOT admitting it, if they find out otherwise, will.