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It's been a long time since I saw that movie. From what I vaguely remember, I'd guess they showed the boss pictures of Donnie for a couple of reasons. First, they'd been investigating him for a l-o-n-g time and now that they finally had him they wanted to rub his nose in it. Second, maybe they were hoping that when he realized how badly he'd been duped, he'd panic and maybe rush to try & cover evidence. If they could follow him, he would lead them to even more proof than they already had.
I don't remember exactly what money you're talking about but I'm sure the FBI has a standard procedure for handling confiscated money. It probably gets added to their budget.
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