You are right to be concerned. I was 17 when my abusive boyfriend raped me. The worst part for me was that I totally believed him when he told me that nobody else would have me and my only choice was him or being alone my whole life. He took away the only thing I valued about myself ... my virginity. After that I was just numb. Deep down I suppose I did know he wasn't good for me, because I refused to get engaged to him, but the more people told me he was no good, the more I insisted that we loved each other! In hindsight I realize that I loved his parents (who had no idea what their son was really like when they weren't around). His parents treated me as if I was their daughter and I craved that. I honestly think that part of the reason that I stayed with him for nearly 2 years was that I so much wanted to be part of a "normal" family.
More than anything your SIL needs to KNOW that she's beautiful, sweet, loving etc. Do everything in your power to help her rebuild the self-esteem that the @%$T%&%!!! is systematically destroying. Don't let him isolate her - find ways to get her away from him as often as possible for "girl's night" or whatever. DON'T keep telling her he's bad news - she can't admit it yet because she's still under his thumb. She is lucky to have you in her life. I didn't have anyone. I was saved by the man who is now my husband. All he did was to let me know that he liked me! He showed me that (in his eyes at least) I wasn't just "damaged goods". That was all I needed to start moving forward. It wasn't all plain sailing - once I was "safe" I sunk into a terrible depression which I needed meds & counselling to get over.
I just want you to know that there IS light at the end of the tunnel. Your SIL needs to start believing in her own worth again. I've been there and, thank God, I got out! I'm now a 43 yr old mom of 2 fab. teens and have been happily married to my "knight" for 21 years!
I wish that I could just "rub out" that ^%$#$@!! Unfortunately all that is in my power is to pray that she gets delivered from this, as I was. May God Bless You for what you are doing! Please let us know when she gets free.