Jack is behaving totally properly for a dog in his position - his owner has allowed him to believe he is the Alpha in the house. He does not feel too secure in this role and knows that he doesn't really match up to the job so is desperate to reinforce his position. He is using the toys as trophies, objects of desire that lower ranking individuals like Duncan can not be allowed to have control over.
This behaviour has progressed to the next level where he has trained his owner to fetch on command. Point out to your roomate that the dog has trained her very well.

You are wise to not give toys to Duncan unless you are there to supervise because until Jack is relieved of the Alpha role this will continue. If Jack's behaviour is taken in hand sensibly and the pack order realigned he may well still be more dominant than Duncan but at least his owner will have the rank to make it clear that it is unacceptable.