How is he cheating the system?   It's a known approach. This is why no normal pool runs a straight up prop system anymore.  At the end of the day your 'tax', if true, is what's really the theft and I hope someone holds you accountable to that.  

This whole thing has been a big joke.  Why you have 100 people putting hash power against your sever is beyond me.   I guess part of it is that you're catering to the newcomers and unfortunately they are still too inexperienced to understand what they're seeing.

I'd recommend to them to take a meager 1% pool fee in exchange for stable payout, no hacks, no shady business and squeeze what they can out of mining eth before it's all over in a few months...