I've read on SDN of this happening for strong extenuating circumstances. Public schools may be restricted in their policies, and accrediting institutions may have some input, but I don't know what "legal" policies you're talking about here.
That said, OP, you haven't mentioned any extenuating circumstances, so most likely those grades will stand. Re-takes where the original attempt and grade is on your transcript for an AMCAS application are averaged into your GPA, regardless of how your home institution calculates it. For DO, this is a different story. Another option might be caribbean schools. If your brother is truly dedicated to his goal, he will do what it takes to get through it. However, the chances of actually obtaining an MD, getting good marks on your board exams, and finding a US residency are greatly diminished.