Actually, he said that he did know, but that he assumed with no action that it would go away.
There's good reason for assuming that. That is the way US law is written. Since it is possible to renounce citizenship for a US citizen, it is considered an assumed renunciation if a US citizen born overseas does not file the necessary paperwork by such and such an age. I think the assumption is that they've picked up a different citizenship and refused their US citizenship.
“it is considered an assumed renunciation”
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No, that’s not right. There are no “assumed renunciations” of citizenship under U.S. law:
“ELEMENTS OF RENUNCIATION
A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship:
1. appear in person before a U.S. consular or diplomatic officer,
2. in a foreign country (normally at a U.S. Embassy or Consulate); and
3. sign an oath of renunciation”
(from the State Department — http://travel.state.gov/law/citizenship/citizenship_776.html )
What you may be thinking of is the fact that it is much easier for a U.S. citizen born abroad to document his or her citizenship by obtaining a Consular Report of Birth Abroad (CRBA), and those can only be obtained by age 18.
However, failure to obtain one certainly does not result in loss of citizenship, it just complicates the paperwork required if and when proof of U.S. citizenship is required.