Praise be to Allah.
His Hajj is valid, so he has done the Hajj that is required of him, but it will not be fully rewarded, rather the reward is greatly reduced. See question no. 34517.
Al-Nawawi said in al-Majmoo’ (7/62): If he does Hajj with haraam money then he is sinning although his Hajj is valid and he has discharged his duty. This is the view of most of the fuqaha’.
In al-Mawsoo’ah al-Fiqhiyyah (17/131) it says:
If he does Hajj with dubious money or with money that was seized by force, his Hajj is valid according to the apparent meaning of the ruling, but he is a sinner and his Hajj is not fully rewarded. This is the view of al-Shaafa’i, Maalik and Abu Haneefah (may Allaah have mercy on them) and of the majority of scholars of the earlier and later generations. Ahmad ibn Hanbal said: His Hajj is not valid if it is done with haraam wealth. According to another report: it is valid but is haraam. In a saheeh hadeeth it says that the Prophet (peace and blessings of Allaah be upon him) mentioned a man who travels a long distance, with his hair disheveled, who stretches forth his hands to the heavens and says, ‘O Lord, O Lord,’ but his food is haraam, his drink is haraam, his clothes are haraam, he is nourished with haraam so how can he receive a response?
Shaykh Ibn Baaz said:
His Hajj is valid if he does it as prescribed by Allaah, but he is sinning because he took haraam earnings. He has to repent to Allaah from that and his Hajj is regarded as falling short because of that haraam income, but he has discharged the obligation of Hajj.
Fataawa Ibn Baaz, 16/387.
In Fataawa al-Lajnah al-Daa’imah (11/43) it says that if Hajj is done with haraam money that does not mean that the Hajj is not valid, but the person is sinning because he acquired haraam wealth but that detract from the reward of Hajj or invalidate the Hajj.