Wow...

Doc, my personal thoughts are that if it is possible (that's a big if, I assume), amazingrando should be booted from the pool.  BitMinter has too great of a reputation to willingly allow an admitted scammer to continue as its biggest miner.
However, I will also support you if you decide that it is not the place of a pool operator to police the mining community.  That's a very valid argument.

Sure, amazingrando makes it sound like he's well-intentioned and unlucky rather than a scammer, but he did breach their contract.  It sounds like the only people who didn't get screwed were the ones who had a physical, notarized contract.

When my dad went in on BFL gear with me, I told him up front that we may very well both lose money and that there were no guarantees.  It appears that amazingrando was not so wise when he tried to attract investors.