I peeked at a module for an RPG. Once. Least satisfying gaming experience I have ever had, and never did it again. If someone can cheat at RPGs and still wants to play, I would seriously question their motives for playing. I would also seriously question whether they were the kind of player I wanted to play with at all. Ultimately, you're GM, so it's your choice, but letting it continue would ruin the fun for everyone but him.
