A couple of things you mentioned that I want to ask about:

Are they still using a name that is inappropriate under the ToS? If so, has it been reported as a name violation or are you trying to roll it into the harassment? You might get farther if you just report it as a name violation.

You mention that it is emotionally painful to have to see them just standing "there". Where is there? Is it a place your and your FC members congregate at on a regular basis? If so, try choosing another location to meet (especially one in a higher level zone a new character can't get to). If it's your FC house, go inside and lock the door. If a FC member has a friend coming to visit, the door can always be quickly unlocked then locked again so they can get in.

I'm sorry this is going on but some of the other posters do have a point - the more you react to this individual, the more you are giving them exactly what they want. The best thing to do is just ignore their presence. If they don't get a visible reaction out of you, they will get bored and move on.