Is it permissible to collect money from friends to cover the Hajj expenses for a person who passed away, who did not pray regularly and committed immoral acts, or is it better to give charity on his behalf?

If your friend did not pray out of negligence, not out of denial, and died after Hajj became obligatory upon him, then the heirs are obligated to perform Hajj on his behalf from his wealth.

However, if he died before Hajj became obligatory upon him, then Hajj is not obligatory on his behalf, and it is permissible for someone to voluntarily perform Hajj on his behalf, provided that person has already performed Hajj for himself.

The best deeds to perform for him are seeking forgiveness for him, supplicating for him, and giving charity on his behalf. It is not advisable to collect donations for performing Hajj on his behalf.