I do believe Lou recognized Malvo, almost instantly, though the scene wasn't played that way at all. I mentioned earlier, there's no way he couldn't know; he and Molly are too close. But I don't think Lou had a choice but to let Malvo go. And to tell Molly immediately after, could be sending her to her death.

Yeah, I thought about that and it didn't make sense. But when you consider that he might be sending his daughter to her death, I might keep quiet too.

I tried to buy into that notion but couldn't; Lou and Molly are too close. If she were my daughter, I would know that face as well or better than she does. We'll see how it plays out.

A few moments after that scene with Lou and Malvo, I realized that Lou must have recognized him. No doubt Molly has shared this case with her dad, complete with chart and Malvo's picture. But Lou played it so smooth, even to Molly and the FBI agents.