Current policy seems to be that if the group winner's account gets banned for cheating, no one progresses. IMO that's unfair because he won the group through cheating most likely, so denied everyone the chance to progress. The 2nd ranked player should go through in this case.
If an account is closed for any reason, that person is auto removed from the tournament. The next player in that group should advance.
Advancing players is handled correctly. http://www.chess.com/tournaments/pairings.html?id=22766&round=1
Awarding medals is not handled correctly. http://www.chess.com/tournament/1st-broad-left-tournament
There was an attempt to make awarding medals work. http://www.chess.com/tournaments/player_summary.html?id=30292&member=johndyson
But it did not. http://www.chess.com/members/trophy_view?id=5637314
didn't know that, thx a lot!
If the cheater is banned before all of the games in his group are complete, then the second best player in the group advances.
If the cheater is banned after all of the games in his group are complete, then nobody from his group advances to the next round.
Looks like this second point, I had not noticed, is demonstrated here.
There is no real final round.
[Original COMMENT DELETED] by TadDude
For issues not specifically related to the topic see http://www.chess.com/forum/view/community/chesscom-policy-on-cheating