I see several things in this whole thread that needs to be cleared up.
USPPA as previously posted has the USPPA #9751A exemption permitting the purpose of flight for giving instruction. ASC has exemption #9785A for the same deal.
Nowhere, have I seen it mentioned the pilot had received a tandem rating from either ASC or USPPA to operate under the exemption. I was able to research the membership directory for USPPA as well as flightschools, and the pilot's name was not present. I was not able to review ASC's membership directory if one even exist.
Secondly, USHPA has distanced itself from the sport of Powered Paraglding, thus #4721L is not valid and has no place in this discussion since it was a powered flight, not an unpowered flight.
Lastly, a foot launch powered paraglider is unable to be registered as a Light Sport aircraft. Thus, any considerations for that avenue are off the table. Foot launch paramotors are regulated under FAR 103 in their entirety here in the US. No other FAA regulations governing their use are applicable.
It boils down to this.
Does the pilot have an ASC exemption to operate as a tandem pilot? I don't know!
Was this an instructional flight? Highly unlikely after reading the deceased's and pilot's biographies at http://www.theflystyle.com/about/flystyle-family.html.
So, you have someone that took someone up for a non-instructional flight that may or may not have had an instructional tandem rating outside of any potentially covered FAA exemptions governing the sport.
I wouldn't be surprised to learn some kind of manslaughter or perhaps more serious charges are filed. Whether the DA moves first, or whether the FAA issues decisions first is up in the air. I would suspect the DA will wait to hear the FAA's response so they can unravel all the regulations and hurdles.