I hope they made some javascript effects when that guy appears. Like the screen shaking, or something. And a giant roar... Just to scare you not to cheat.
But it may be just like some have already said - He takes some items from you.
By the way, does anyone want the Cheat Monster available as a color option for Grarrls? Like the malevolent plushie poogle sentient... Only available from the lab. I know he is giant, but a smaller version or something. That would rock.