I would usually say that it's a "family" matter, but you are family (at least married into). Nevertheless, once he steals, money or otherwise, it needs to be addressed right away.
I've seen some guys riding in black and white vehicles that might be able to help. File reports and such.
Just 'cause he's your wife's brother doesn't mean you have to put up with his crap. Gotta cut your loses.
And no I didn't read your whole post, in case my answer doesn't make any sense.
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