I had something similar in a JV game last year, except I think it was an end around who received a "pitch" from the QB and then ran toward the sideline and threw a forward pass. It was a long gain -- perhaps a TD -- but we did flag it and brought it back.
Just remember, forward handoffs behind the line are fine. They can do that as many times as they want without an effect on a forward pass.
OK, so we agree this is a foul. What is the penalty, enforcement spot, clock, etc.?