Did your H say no? Do they work together or did he just call your H out of the blue? It would sound fishy to me and I would call my friend. If he's wracking up debt all over the place, I'd want to know asap.
That is so odd. Why would he just ask your DH? It's your money too.
Did he think he would give to him without even consulting you?
That is soooo messed up. I would hope your DH would just cut him off right away and tell him that he doesn't make financial decisions without his wife.
I think I'd hold off on telling my friend until I had more information, though. Only because it goes w/o saying that there's obviously a lot more to this story.