Yes, I know, but if I have proof, coroborated by my copyright claim, and an agreement from the sites that take the model down, that it was an illegal act, then am I committing libel?

Or do I just let it go and let the person carry on as if he has done nothing wrong, even if he has illegally distributed hundred's of dollars worth of products?

Your specialist military, sci-fi, historical and real world site.