In a four-count indictment unsealed Thursday in the U.S. District Court for the Western District of Washington, federal officials said that Gregory Thomas Kopiloff used P2P software such as LimeWire and Soulseek to snoop for and steal identity, banking and credit information belonging to other users on file-sharing networks.

The illegal activity began around March 2005 and continued through August 2007. During this period, Kopiloff is accused of fraudulently buying at least $73,000 worth of merchandise with identities and financial information belonging to at least 83 individuals, the indictment said.

According to officials, Kopiloff used P2P tools to surreptitiously gain access to a wide range of information stored on the computers of other users on file-sharing networks. In addition to banking and other financial data, Kopiloff would specifically search for federal income tax returns, student financial aid applications and credit reports that were stored on the computers of other P2P network users.

He then would proceed to use the data to screen potential victims based on their income levels and credit histories, "in order to identify victims who were most 'credit worthy' and under whose identities he could maximize fraudulent merchant transactions," the indictment said.

The arrest highlights growing concerns about how file-sharing networks are becoming treasure troves of information for identity thieves and other types of fraudsters.

The situation is the result of personal information being leaked onto these networks by individuals who fail to take the proper precautions for securing their computers during P2P sessions. Popular P2P clients such as Kazaa, LimeWire, BearShare, Morpheus and FastTrack are designed to let users quickly download and share music and video files. Normally, such P2P clients allow users to download files to and to share items from a particular folder on their system with other users on the network. But if proper care is not taken to control the access that these P2P clients have on a system, it is easy to accidentally expose and share personal data stored on the computer with all other users on a file-sharing network.

According to security analysts, the information available on P2P networks, as a result of such accidental exposure, includes federal and state ID card data, passports, Social Security numbers, credit card information and bank account details.

A study on the dangers of inadvertent data disclosure on file-sharing networks earlier this year by Dartmouth College's Tuck School of Business showed that such information is increasingly being mined on file-sharing networks by ID thieves. The study examined data involving P2P searches and files related to the top 30 U.S. banks over a seven-week period between December 2006 and February 2007. The analysis showed that a large number of searches made on those networks were aimed at uncovering sensitive financial data from individuals.

And it's not just personal data that's at risk on these networks. In July, the House Committee on Oversight and Government Reform heard testimony from several witnesses, including retired Gen. Wesley Clark, about how everything from classified military documents to corporate data is floating about freely on file-sharing networks.

The leaked documents on P2P networks that were cited as examples during the hearing included the Pentagon's entire secret backbone network infrastructure diagram, contractor data on radio frequency manipulation to defeat improvised explosive devices in Iraq and physical terrorism threat assessments for three major U.S cities.