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If you take away his computer, he can likely find more porn on his tv set if he has cable.
I wouldn't be threatening him with jail time for sexual harassment if it were me. I'd find the source of what's happening to him instead. Denying his wrongdoing and being argumentative/not believing what's being said to him are all signs of dementia as well. So if he's suffering from this, he's not realizing that what he's doing is not 'socially acceptable.' In his mind, it's perfectly fine and it will STAY perfectly fine until medicine helps him think differently.
Wishing you the best of luck.
Has anyone told him to stop and that his behavior is unacceptable?
If he is touching and showing people the pics, he is displaying symptoms of dementia. Please do a little research to familiarize yourself with some of the behaviors. Make an appointment with his doctor and accompany him. Pass the doc a note requesting a cognitive exam and they will be glad to oblige. Then the results will help you know how to provide him the appropriate care.
If he has no dementia, but has a porn addiction and is acting inappropriately, he needs a therapist, not an MD. He's lucky they haven't reported him to the cops...yet. Or, like Vegaslady suggested, the computer can "be out for repairs". Hopefully he doesn't have a smart phone or it will be pointless. Good luck!