Unless he's willing to give you all your money back... then you definatly have an issue.
If he goes on the probation list... then returns what he still owes you... it's not going to make him any more innocent... at least not in my eyes.
That said if he does return the money, you will be obliged to remove him from the probation list correct? Once he comes off the probation list, unfortunatly for him (& fortunatly for us), the deceit of his actions will still remain identified.
This seems like a HOS issue more than a probation issue... especially since his excuses were proven to be fabricated.
Long time boardies need to vote this one out.