Having actually worked on fraud cases, they are a waste of time. In order to prove fraud, you have to prove intent. If you report it to the cops, then its completely out of your hands and up to the government to decide if they want to pursue it. We aren't talking millions of bucks here, don't think the cops are chomping at the bit to get after someone because of a few broken promises to arcade nerds. Now if he was passing bad checks, or ripped off a bank, that would be different, but I really doubt the cops care about stuff like this, they have better ---steaming pile of meadow muffin--- to do. That leaves civil recourse, of course, that is also a huge waste of time. You spend all of this time and money hoping to get your money back, but you never do. Most people that steal money or commit fraud do so so they can spend the money, people don't rip off other people so they can put money in their 401(k). So even IF you win, and get a judgement, chances are the person you have the judgement against has no assets with which to satisfy the judgment.
Its best to just cut your losses and move on.