My nephew molested my daughter
Four years ago we went to my sister's house for dinner. The adults were in the kitchen and my five year old daughter and eight year old son were upstairs with my eleven year old nephew. The nephew told my son let's play "house" and you be the body guard. He told my son to go in the closet and not come out until he was told he could come out. He laid on the bed and pulled his pants down and told my daughter to fondle him. My son shouted from the closet asking if he could come out now and my nephew said "not yet". After a couple of minutes my son came out anyway and saw my nephew laying on the bed and my daughter touching his penis. My son shouted "what are you doing, that's really gross". My nephew said it's not my fault, your sister pulled down my pants. My son told me about it and my sister said she wanted to get her son's side of the story and she would get back to me.
Two weeks went by and she didn't talk to me about this incident. She and her husband have never acknowledged what he did or how they planned to deal with it. No apology either from any one of them. When I called her about it she says "why do you keep bringing up the past, just let it go." My other sister told my father "my nephew was only eleven when it happened and it happened four years ago - tell her to get over it". I haven't talked to my sister and we are going to visit my parents who live near my sister in Texas (we live in California). I am not planning to make contact with her since it is apparent that she wants me to just forget the whole thing. What about my daughter? I have a duty to protect her and keep her away from my nephew.
I did not report this to the police because I did not want to destroy her life. Please tell me what you think?