Since the others have posted great info on how to deal with the mess at hand, I will comment on the other aspects.
I disagree totally. Talking business with 'friends' tells you who the real friends are.
My closest friends know all about my adsense site. They know how much I make roughly as well. And they will never click and they won't steal it. Just like they wont steal the $200 on the bannister when they leave.
Consider this an aweful way to prove something to you: that indeed this person was not a good friend at all.