Wow, well done; a real pickle. This dilemma has potential family betrayal and a cheating youth baseball coach.
Can I assume that your sister & her family have no idea that there’s a rule against 12YO’s pitching in the Minor division? Is there any possibility that two different leagues have different rules? (Although you state the Coach is only pitching your nephew in games against your league)
Is there any ironclad way to handle this anonymously? Can you pull a league official aside and strongly recommend they check the B.C.’s of each player against the starting lineup? … This’ll back-fire big time if there’s any chance the ‘spot-check’ is traced to you.
How about telling your sister: ‘Look, I have to tell; not to undermine Johnny Nephew, but there is a rule that 12YO are not supposed to pitch in this division. I wasn’t completely aware of the rule before, but it came up in a conversation at the league and I confirmed it with a league representative.’ Sort of feign that you brought the information to her (your sister) as soon as you found out about it?
And then worse case, because you’ll have so little control once the fire start burning is to talk to a Manager in your league in the Minors division prior to the next game your nephew pitches.
As a side bar, I’d be interested to know why a 12YO who can throw strikes that regularly wasn’t able to make the Majors division. And it’s not the end of the world for Nephew Johnny. I assume if he’s off the bump he’ll be put at one of the other glamour positions: SS or C.