A Seattle man faces up to 29 years in prison after being charged with using the LimeWire and Soulseek P2P (peer-to-peer) networks to commit identity theft.

Gregory Kopiloff was arrested on Wednesday on charges of mail fraud, accessing a protected computer without authorisation and two counts of aggravated identity theft, said Emily Langlie, a spokeswoman with the US Attorney's Office for the Western District of Washington. This is the first case that Langlie's office is aware of that involves P2P identity-theft charges, she said.

In court filings, federal prosecutors alleged that Kopiloff began the scam around March 2005, using the P2P networks to search for victims who had accidentally configured their software to share sensitive documents. Hard drives were searched for "federal income tax returns, student financial aid applications and credit reports that had been stored electronically", court filings state.

Using that information, Kopiloff would fill out online credit-card applications, and then buy products such as iPods or computer hard drives, which he then resold for cash, typically at about $0.50 on the dollar, federal prosecutors claim.

And Kopiloff wouldn't steal just anybody's identity, according to Kathryn Warma, assistant US attorney for the Western District of Washington. During a conference call on Thursday, she claimed that he'd first run credit checks on potential victims to ensure that they had at least $150,000 in annual income. "Mr. Kopiloff was no slouch," she said.

Kopiloff was allegedly able to buy more than $73,000 worth of merchandise using online credit-card accounts he'd set up using the identities of at least 83 victims.

It's easy for unsophisticated users to accidentally share sensitive information via P2P networks said Christopher Boyd, director of malware research with FaceTime Communications. "Some P2P programs have 'share folder' options and if you accidentally hit it, bam -- it's out there without you even knowing about it," he said.

But luckily there's an easy fix for the problem. Boyd recommends that P2P users place all of their sensitive documents on a stand-alone drive, separate from the main PC. "It's about the best way to ensure you don't accidentally share your life story with the rest of the world via P2P," he said.

While Kopiloff may be the first to be arrested for this type of P2P crime, others have caught on to the idea. P2P network monitoring company Tiversa recently spent 13 days monitoring queries on P-to-P networks, logging more than 55,000 searches for the term 'credit card', and more than 70,000 searches for credit card names such as Visa or American Express.

"We were able to see people searching for credit card information," said Tiversa CEO Robert Boback during the conference call. "We were also able to see this credit card information," he added.