Is there something in your terms & conditions about they are not allowed to use illegal content?
If the content realy is illegal try pointing them (or become a reseller) to a cheap content provider, there are enough content cd's out there for about $150 ... if they can't affort that than i think it is safe to remove them from your program bacause they are not generating a lot of money for you.
------------------
This is how i make money: