You get mad props for actually wanting to find a constructive solution to this issue and not jumping to any knee-jerk responses. I know I wouldn't have reacted as positively.
Like others have said, your options are basically:
A.) Confront the thieving bastard, aggressively or politely, but let him know that you can't be friends with someone you don't trust. Maybe he knows he has a problem and wants to change? (I doubt it, though)
2.) Ignore it and cut ties with him.
D.) Punch him in the dick.
I actually advocate all three options, although the order is up to you. What a shitty situation and it sucks to have to go through that. Again, I applaud your caring attitude and not jumping to any hasty decisions.
I would think that if he's burned you once, then he could easily burn you again. Is the friendship worth it? That's up to you, I suppose. I hope you bump this thread and let us know how it works out and you recover your stolen gear. Good luck!
It'll be awhile before I figure out how to do one of these. :P
