Help me justify this...

The original home owner and new home buyer are arguing about the legality of the way a feeder has been installed in a single family dwelling. They are arguing because a home inspector pointed it out along with some other problems that have been corrected.

I looked at it and don't like it but I'm not exactly sure which CODE sections have been violated. If it were me I would just replace the whole thing and get it over with.

So here it is...

As I said, single family dwelling with a 150A service disconnect on the outside of the house. Someone before the current owner, ran SE cable inside of sched. 40 PVC. Then, probably when they discovered they needed four conductors, ran an aluminum 2/0 part of the way on the outside of the PVC. The cable/PVC runs about 15' through a crawl space accessable from the basement to a panel in the basement. The PVC is not installed as a complete system but is duct taped together, on an angle, in two places. The strands that would normally be the GROUNDED (neutral) conductor is being used as the GROUNDING (equipment ground) in the panel. The extra piece of 2/0 that was installed partially on the outside of the PVC is being used as the GROUNDED (neutral) conductor.

In order for me to fail this installation I have to site CODE sections.

Help me out guys...
Thanks
Brian