I stand by my premise about not doing anything about it, because if he is advertising either he is ignorant enough (in this case reporting it is just mean), stupid enough (which will be messy for you) or smart enough (if he knows loopholes and knows a good lawyer then he goes free and chances are that you get screwed for nothing)... Now, if you still want to make a move i suggest to do it wisely, check with everyone that knows this stuff to see how you can shut down his business without him going to jail and you getting screwed in the processs...
Just 3 basic things one has to know about this:
Modding a console in every form: Not illegal, just loses its warranty and the company that makes them is not responsible of anything that happens to it...
Teaching: Not illegal (it could be about shooting someone or making crystal meth, as long as the process is not made while teaching, is still not illegal)
Copying and distributing software: Illegal, but with too many loopholes that a good lawyer can use...