Problem
This is caused by faces inside your mesh. The main sign of this is that the crease only appears when subsurf is turned up; the inside faces add weight that pulls the verticies inwards (according to the subsurf algorithm).
Solution
Tab into edit mode and uncheck the X box in the Mirror modifier. Your properties panel should look like this:

This will leave you with half a human. Change into face select mode:
and select these faces:

Key X and select Faces. Tab out of edit mode and recheck X in the Mirror modifier. This is the repaired mesh:
