He claimed the fund was worth millions when it was really worth zero.

Except didn't it end up making investors much more?

That came later, after the incorrect assurances.

But then he tripled their money...

If I steal money and use it to buy lottery tickets, it doesn't become less of a crime if win and am able to pay the money back.

You don't know his case, you better not comment.

That doesn't make his claims any less fraudulent.

While definitely immoral and risky I might abide by "no harm no foul" - no one was harmed in this, end sum is positive

This time. Because he paid those investors with proceeds from his other company. But letting him off here means he'll likely do it again, and those investors might not be so lucky.

That's not the way federal law works. Beneficial ends don't justify illegal means in the eyes of federal prosecutors.