Have you told your sister about what is going on? She needs to know, especially if she has children. Keep your children safe. You don't want him to start viewing grandpa/grandchild porn. . . Ick.
Your next course of action should include prayer.
Here are some articles on addiction that may be of use to you.
LDS.org - Ensign Article - When a Loved One Struggles with Addiction
LDS.org - Ensign Article - Hope, Healing, and Dealing with Addiction
LDS.org - Liahona Article - Addiction Recovery: Healing One Step at a Time