You have 2 options: you can either ignore it and continue running ads after alerting Google about the problem (they will just recalculate your ads as they always do when they check your clicks for invalid activity at the end of the month), or you can disable ads for a longer period of time and temporarily replace your ads with CPA ads rather than CPC.
Competitors like this have nothing better to do than to report your ads, clickbomb your website, and report your content because they have a lot of free time on their hands since they don't know how to run a business or a website. Even if you do manage to get them to stop, you have to also decide to either let what they did to you go or to teach them a lesson. Letting them get away with it will just make them think that they can get away with it in the future.