Step #1.... Determine if their license is still valid, or if they allowed it to lapse. That information should be available on the FCC site. If it has lapsed, they may be operating as they used to, and since it sounds official on the air, no one has challenged them.
If their license is valid, you will need to find another frequency to use.
If it has lapsed, you don't need to "throw them to the lions". Send them a nice letter, letting them know that their secret has been discovered. Give them some time, but if 6 months goes by with no change, send them another letter, this time let them know that you also sent a copy to the FCC (and do so). If it gets to that point, I bet the problem will sort itself out quickly.