That is elder abuse. Anyone who knows about it and does nothing about it, is complicit. Your parents deserve to know, and to take steps to further protect themselves. Wouldn't you want to know if it was your money and your kid? Sad situation.

They have to return the money or go to jail.
Stealing from family for any reason negates the familial relationship or any kind of mercy.

I fear that if I let them off the hook for this, they might try to steal from them in some other way. I would tell the elderly parent. My sibling is lucky I didn't go to the police.

Where's the confront the sibling, make them.return the money and tell the secret to my parents and other siblings.... choice. Lol. That's what I would likely do.

I would tell them that they chose to damage the relationship by their own actions and the only way to try to repair it is to own up to it and atone for it in some way.

I would also confront them to find out why they felt the need to steal money. Because I would be concerned about what made them so desperate. :/

Have them return the money.

jeez that's a sad situation to be in

They’d have to return it. If they gave a damn about the family they wouldn’t be stealing from them. My parents found out my sister was stealing before I did. I found out when she began stealing from me.

Beat the hell out if him, tell my parents and the cops

If they will return the money I would keep the secret. If they won't or can't then you have to tell your parents.