Legally:
I think that for a "deception" case to stand up you need to prove that the examiner knew, and was aware of the wrongdoing. As I already said, this was never going to go un-noticed at Gatwick so who would believe it was intentional?
He "ought to have known" will probably not be enough to convict him/her or fraud.
Morally:
This examiner needs to take up another line of work. I know that's a loss to GA of an examiner, and what are the chances of re-offending?
But the shame value alone would make a reasonable man's eyes water.
Should the club / school need to reimburse flight time and instructor (& CAA) fees for all students over a 12 week period, than bankruptcy must be looming and only the lawyers and accountants will get anything.