Wha? That doesn't make any sense. The boost controller operates off of charge pressure whether it is at the IC piping or intake manifold (or BOV vacuum line). Are you sure your friend didn't tell me to put it in the line backwards? Still shouldn't matter unless it has an internal check valve. It is just a needle valve to restrict the pressure the wastegate actuator sees. And like I said, I wasn't sure which way was which so you just had to watch the gauge on the first couple pulls and adjust accordingly.
Here's the install manual for that controller:
http://www.turboxs.com/faq/tyrboxsstd.htm
Looks like you have to turn the knob 3 turns CCW to get it to even begin to pinch down and increase boost. So to increase from 5 psi to 12 psi, you'd have to unwind that knob like 10 complete turns (3+7). Does that seem right?