vbenhancer is correct, this is a matter for vbulletin.com support, not vbulletin.org - the modification site of vbulletin.
Legal action? Feel free to call/consult with your attorney if you feel it warrants that, no one here or on vbulletin.com will give you legal advice, no one is qualified to do so.
Realistically reporting the site for piracy it may takes weeks or longer to shut down. It is a slow bureaucratic process unfortunately.
You would be far better off if you can reason with them.
If you still have admin access to the forum you could create a plugin that would take them offline- but only long enough until they figure out how to disable hooks in their config.php file.
But if you want to try go to the Admin CP -> Plugins & Products -> Plugin Manager and create a new plugin on the hook
init_startup, product: vbulletin, execution order 1, title - whatever you want- and PHP code simply:
Code:
die("Witty message here");
Set active to YES and SAVE. The site should pretty much die until they figure out how to fix it.