madmooses,
Down and dirty, is that it is legal to buy a LEO stamped lower/rifle. In order to do this the rifle must be made to post-ban configuration, Which requires that the Pre-ban features be removed.
A little information of the M-4.
The upper will have feed ramps that are milled into the upper, with the 14.5" barrel having matching feed ramps lowered to work with the upper. The upper will be marked M-4 with C M. The lower will be a Automatic/burst function lower, which would included a telescoping stock. If the barrel was indeed a 14.5" with a non-welded FS, then the rifle would require a SBR stamp, but would still be LEO only due to it being in pre-ban configuration on a Post-ban receiver. The full auto lower would require a Form 5 to transfer, which is for LEO only.
Point blank, the seller is not selling a M-4, but a clone that is built on a Post-ban LEO lower. The only true M-4 items on the rifle would be the upper receiver, and the barrel with a Brake welded to the barrel to get the barrel 16". The rest would be clone parts, due to configuration of it being Semi-auto, and a Post ban configuration.
Either he is selling a Post-ban M-4 clone, built on a LEO lower. Or, is selling the real thing, which would illegal as hell to sell to a civilian buyer, since you can no longer transfer the weapon on a form 4(true m-4's are full auto's), or get the rifle on a SBR tax stamp due to FS not allowed on Post-bans rifles.
Either way, run like hell from the deal.