I guess with $200 million untraceable money you can afford to buy an identity of a dead Indian.

I would think since every transaction is recorded on the blockchain, and he is the only one with the keys, any activity involving those BTC would raise a red flag.

But suppose that some time from now someone moves all that BTC into a different cryptocurrency, potentially via automated services like shapeshift.

What happens? How do people punish him?

Death certificate is issued by local authorities, so easier to bribe. But valid Passport will be hard to get.

That could have been obtained before the "death", anywhere in the world. (and forged entry stamps could also be obtained)