Hi Dale,
Ditto the other comments here. Sensitive materials are a common concern, both electronic and hard copy in schools, businesses and organizations.
However, what about a safe in the living room or a set of safety deposit boxes? Your promise, plus placing the super confidential material (say minutes of verbal conversations) in individually password protected documents/files that are stored in Moodle. Probably not the sort of solution you are looking for.
There is always a risk.
Chris