@PinkLipstick,
Is there any mental health agency involved here? Her behavior - besides being illegal - borders on a mental health issue.
Don't feel guilty about distancing yourself from this entire scene. It sounds like it has been going on for some years and is a huge problem for the family.
Don't feel that you have to solve it, but you might let some agency know what's going on there.
May I ask the ages of yourself, mom and grandmom?