LOL Great thread.... When I didnt get arrested for this http://forums.digitalpoint.com/showthread.php?t=433874&page=6 , I never will.. Brilliant though!
Google won't get you arrested, as people say here.. they can only ban him. However, your friend just made it very easy to be found. Warez sites are illegal and people behind them usually try as much as they can to hide their identity. By putting his adsense code on this site he can be traced without any problem - a warez site is a criminal offence so google must supply details about his adsense account to fbi if they ask for it. Even if he didn't fill in his real name and address, they can follow the money (eft transfer, or the address where the cheque is sent to and who cashes it in at the bank). So your friend could just as well have put his real name and address on the main page of the warez site and ask to be sent to jail.. If this will happen or not will probably depend on how popular the warez site is and the country you live in.. but still it's a pretty dumb move.
No ones saying google will arrest you lol. Were saying they will ban you. But as a webmaster if a competitors negligance effects your earnings, you have the right to launch legal action. Not that any one would. Its correct, but really hyperthetical because i doubt anyone would do that.
Everyone i just wrote a post on it. Lets see how popular this gets since everyone wants to have a say on it. I stand by my claims 100%.