Plot hole: The police let Norman back to his house on the same night multiple murders happened. He is even allowed into the fruit cellar, where most of them happened. (01:38:25)
Plot hole: When Norman's doctor follows Lila to Norman's house, by the time he goes into the cellar, the killer has killed Lila, hid the body in the pile of coal, and cleaned up. Highly unlikely in a 4 minute time frame.
Answer: Norman was found "not guilty" by reason of insanity. Therefore, once he is deemed to be no longer a danger to himself, or to others, and is released from the mental institution, there is no crime he can be sent to jail for (i.e. he has no criminal record for the murders). I haven't done enough research to tell you if a serial killer in recent times has ever been found not guilty by reason of insanity and subsequently been released, but there are numerous accounts of people being released from mental institutions after committing murder that are then considered free.
Bishop73