lol. in the modern times, every source of income is used either legal or illegal. I have seen lots of erotic content on the web that has Adsense. I can honestly say that google won't ban them until a report has be filed. i have visited the site recently and it still has ads to it. its running for 5 months now. if you have time to complain to the big G, why not.
The ads read: "10 Rules to Cut Belly Fat" "Accredited Online Degree" "1 Trick to Lose Belly Fat" I think Google is reading images and thinks she has too much belly fat and that she should get an Online degree and quit the porn scene.
maybe he just didn't read google adsense term. it will be very kind of you if you don't be hurry to report him/her. instead, you can tell the webmaster that what he/she are doing can make his/her adsense account getting banned.
Dude he is not stealing Google's cash but innocent people who use Adwords as you must know that Google pays from the income generated by Adwords