What happens to ETH lost when staking?

I've been doing a lot of research into POW vs POS recently. Many sources talk about the advantages of POS, as well as the repercussions of cheating the system. Everyone seems to agree that a selected validator who cheats gets their staked currency taken away (hence why the currency is at stake). I haven't been able to find out what happens to the staked currency after it has been taken from a cheater, however. Does it just evaporate into the ether (pun intended)? Does it get redistributed as a reward to the next person who stakes (or the people who caught the cheater)?

I glanced through the white paper but didn't see anything on it. Can anyone out there help me (sources always appreciated!). Thanks