This happened to me with one or two of my sites in the past. Here's what I did...
The guy was in Germany. He copied one of my sites and kept all my link trades intact on his copy. He renamed the site, adjusted the look of it slightly, then began contacting all the site owners of the link trades to set up his own traffic trades. Several of those webmasters then contacted me and alerted me about the dipshit.
I had a lawyer friend of mine draw up a rather stern and official-sounding C&D order and emailed it to him, but usually these twits who go copying other's sites are basically assholes by nature, so they tend to be quite cocky. I didn't stop there, I also sent notifications to his host as well as his ISP. (had to do some digging to find that information out of course).
Before either of those were moved to action he ended up changing his copy of my site even more, so it looked just different enough, but I put out the word anyway to about 300 webmasters that he was blacklisted. His copy of my site never really took off, and about a year later his domain was a dead link.
Sounds like a hassle, but I'd like to think it was worth it, and that cheaters rarely if ever profit from me.
