One possible course of action is to talk to the student's advisor about a "hypothetical," that is, ask him how he would feel if he were told that someone had plagiarized a PhD thesis in such-and-such a way. 

One possible result is that he is entirely surprised, or better yet, indignant. Then you can follow up with your secret and tell him the truth about his student.

Another possibility is that he winks and then says something like "yeah, these things happen from time to time." If that's the case, he "knows," and then it's up to you to decide (from a political point of view), whether or not to bring it to his **official** knowledge. 

This idea came from a novel, "Strong Medicine" by Arthur Haley, where a young doctor went to his hospital CEO to inquire about how he should advise a "friend" to report that a senior doctor (his boss) was operating under the influence of drugs. The CEO said, "I don't want to deal with problems from another hospital, but tell your "friend" to keep his mouth shut," then winked at the young doctor and told him how valuable the boss was to his hospital.

The young doctor had his answer.