What should a guardian of orphans' money do if he invested their money with someone who was later found to be involved in usury and subsequently lost his business, knowing that the received profits equal the principal, and are these profits considered principal, and is he sinful for this?

There is no issue with deserving the principal capital, even if the person engaged in usury, as Allah says: ﴿And if you repent, you may have your principal – [thus] you do not wrong, nor are you wronged.﴾. Therefore, what the questioner received is considered the orphans' principal capital.

As for the judgment of sin, it varies according to the questioner's situation and his diligence in assessing the orphans' best interest, as Allah says: ﴿And they ask you concerning orphans. Say, "Improvement for them is best. And if you mix with them, then they are your brothers. And Allah knows the corrupter from the reformer."﴾. Jurists have differed on whether trading with an orphan's money is obligatory or recommended. The more correct view is that it is obligatory to the extent of providing for their expenses and zakat, provided it is possible and easy, because trading with an orphan's money is fraught with risks.

Therefore, the orphan's guardian should strive to achieve the orphan's best interest, while realizing that guardianship over an orphan's money is a difficult task, as the Prophet, peace and blessings be upon him, indicated to Abu Dharr: "I see you as weak, and I love for you what I love for myself. Do not rule over two people, and do not be a guardian over an orphan's money."