Cutting off ties with your "Rahim", is haram and will result into subtracting Allah's mercy in your life. Pls do a good reading on this using the following link:
Besides, It is your nephew who did it and not your sister. Hence cutting off relations isn't solving any issues. In fact it's only further escalating it. Like life time blamings. It would be wise if you tried to solve this issue collectively as a family and reach out to your nephew who really needs help. He must have done this for a reason. Hence that's the greater issue and needs to be addressed immediately.
Hope this is resolved.