Mr Pantomime said:
Do you want to be Blarg McBlarg? Didnt think so. So remember, do something.
Uh...I think you may have forgotten a crucial word or two there.(NOTE: I am not Blarg McBlarg, the guy you quoted. Just noticed that bit of nonsense and thought I'd intervene. Speaking of which...)
OP: At the very least, confront your sister about it. I wouldn't call the cops just yet, but don't just forget about it, either. Find out exactly what happened first, and go from there. The fact that you even need to ask this is actually kind of mind-boggling to me, especially since you're apparently old enough for your sibling to have a 14-year old daughter. That means you're almost definitely an adult, so my advice: Act like a damn adult.
Seriously though, get off your computer RIGHT NOW and GO TALK TO HER.