Did they prosecute everyone who lied to the Nazis? Idiots.
Unfortunately, the Nazis were not the only demographic he defrauded...although I kind of think of him as a very sympathetic character, and certainly a master technician in his own right as a painter. I suppose a loose parallel could be drawn with the American mafioso who assisted in intelligence gathering in Italy during the war. They did a service to their nation in the time of war, but their motives tended to be in service of their own interests rather than for any grand patriotic reasons.