First of all, very good post!
I don't know, this might seem hard, as the Horde Character is probably a lowlevel, but if you're using the Booty Bay Auction House, then you could just go to Ratchet and sail to Booty Bay with the Horde Character.
When the Horde Character has landed, you go onto your Alliance Character and put the item on AH for like 1c or something...
Then you relog the Horde and buy it, after that, you can probably sell it for a nice amount of money, without having to take away the 20% Gold from yourself.
And btw...
Well, if he's making nice money on that, who are you to question his methods? If some superior/epic - I don't know - is put on BB AH for 1c, then he could totally nail it for a lot of Gold, without being illegal.
Anyway. I'm saying it again,
very. Nice. Post!
- Blackmaw