Bumped to 2nd Place by a Spammy, Terrible Website, Please Help!

For the past 6 months or so I've had a niche website quietly ranked for a low-competition keyword receiving nearly 10,000 searches per month. Conversions weren't astounding, but even off of what would normally be considered a "non-buying" niche it makes $150-200 on complete autopilot.

Unfortunately, i noticed traffic was down and that I was no in the #2 spot instead. The website that is currently beating me is god awful. It's your typical spam site, with much less content on the ranking page than mine, written in bad grammar, and provides no value at all, only filler lines about "what you'll learn if you sign up with me" and gross keyword stuffing.

Considering I've built an authority site that actually provides information, helps people, and even gets linked to all the time by others on yahoo answers and the like as a resource for the niche, yet can still be beaten out but such a spammy site (he copies one of the vendors in the niche's opt-in forms and email series word for word) is so discouraging.

This site has been a labor of love for me and I really want to get it back to where it was. If any of you has any advice for doing this, please let me know. If there's any certain backlinking strategy, or if there's a way to report their site to google (if mine gets a manual review it will likely stand as it is a real, large, information-providing resource, theirs will not), or if that's even advisable.

Thanks in advance for any help you can offer,

- Brandon