I work in HR and second everything people have said on here about reporting it to HR, your boss, his boss (in that order). Do NOT confront him until you have told them - if he's planning something sinister then this gives him time to think up a counter attack or excuse. Also when reporting do not say it was definitely from him or else it could look like sour grapes on your part (although you can say that you believe it may be from him and certain evidence indicates it was him but that you want a full investigation to determine who exactly it was). Check out your company's grievance / disciplinary processes and follow them to the letter, though be warned if he's contracting there isn't much they can do to him via these policies as they only usually apply to full employees and instead they should just terminate his contract. Importantly try to remain as impartial and professional as you can about this.
Start by raising your concerns about the misuse of the computer and if they fail to respond then bring in the sexual harrassment thing and they should stand to attention sharpish. If they don't then start to bring in the big guns (i.e. tell them you are seeking legal advice).
Has your lawyer responded?
Let us know how things have gone.
Foul man, BTW. Hope he gets the sack.