Why doesn't K2 track down who is doing these "hacks" by looking at who-had-item-nnnnn yesterday from backups, and who-has-item-nnnnn today. Then get CS to log into the hacker char, and give back the stuff to the original owner. Wipe the hackers char down to 0 everything. Block the hackers IP from all contact with the game servers (issue a block on their "most external" routers). Issue solved.
Put in part of the game T&C "we reserve the right to block IP addresses indefinitely, and if that accidently affects you then that's hard luck".