Basically, there are two ways of dealing with the neighbor depending on your relationship with the neighbor and his/her level of distaste for your actions.
The first way would be to sit down with the neighbor and talk. Perhaps even bring them to an OC lunch or seminar.
The other would be to marginalize, ignore, and protect yourself from your neighbor. Do you have an audio recorder? If not, I would suggest getting one. That way if your neighbor tries to tell the police that you did something you didn't, then you will have proof of a false police report.