Point One: It sounds like this kid is doing simple-roll thievery in situations that require full-blown skill challenges. You have everyone's permission, here and at your table, to be a full-blown DM who uses the full-blown rules. Let this kid hear you roar in the form of a proper skill challenge.
Point Two: It sounds like this kid (and the group) isn't role playing. Reputation is part of role playing. If the kid continually needs to convince people he didn't do something wrong, eventually nobody believes him, even when he is telling the truth.
Scenario: Have an NPC steal from a Big Bad Evil. Have the BBE assume he kid did the stealing. Have the BBE confront the kid due to his reputation, then have the kid perform a full-blown skill challenge.
Of course the kid didn't steal from the BBE. If the kid isn't lying, his bluff check doesn't do him any good. Of course the kid will role a stealth check to get away. If the kid is in an open field with no cover or in a market filled with eyes staring at him and the BBE, his stealth check doesn't do him any good.
Maybe you Let the kid get away (no bluff, no stealth, just a pathetic guy running away from someone bigger than him) and stick the BBE with the kids companions. After the BBE performs a TPK on the rest of the party you have an entire table full of people pissed at the kid. You now have leverage, at which point you offer to pretend this was all a dream the character had that convinced him to change his ways. The kid can still lie and steal and sneak, but doesn't do it when it makes trouble for everyone he hangs with.
Point Two: It sounds like this kid (and the group) isn't role playing. Reputation is part of role playing. If the kid continually needs to convince people he didn't do something wrong, eventually nobody believes him, even when he is telling the truth.
Scenario: Have an NPC steal from a Big Bad Evil. Have the BBE assume he kid did the stealing. Have the BBE confront the kid due to his reputation, then have the kid perform a full-blown skill challenge.
Of course the kid didn't steal from the BBE. If the kid isn't lying, his bluff check doesn't do him any good. Of course the kid will role a stealth check to get away. If the kid is in an open field with no cover or in a market filled with eyes staring at him and the BBE, his stealth check doesn't do him any good.
Maybe you Let the kid get away (no bluff, no stealth, just a pathetic guy running away from someone bigger than him) and stick the BBE with the kids companions. After the BBE performs a TPK on the rest of the party you have an entire table full of people pissed at the kid. You now have leverage, at which point you offer to pretend this was all a dream the character had that convinced him to change his ways. The kid can still lie and steal and sneak, but doesn't do it when it makes trouble for everyone he hangs with.