Im not endorsing cheating, but i am more concerned about why this ONE INCIDENT, two years ago, weighs so heavily on the OP's mind.

If the brother was making it a habit to engage in risky behaviors at nightclubs on a regular basis, lying to his wife, regularly using the sister as a beard, then certainly something should be done. Stop participating, for one.

But this just seems like being a tattle-tale, and that it would hurt HER relationship with the brother and the family, more than his.

Let she who is without sin cast the first stone.