Daughter took 40k now alleging abuse

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Last summer my sister in law asked her father for a 'loan' of €20,000 as herself and her husband were struggling with mortgage, 3 kids, husband's taxi takings down, etc, etc.. anyway he gave it (still can't understand how he could hand over so much since he is not exactly flush) and a few weeks after she got cash she attempted suicide ended up in St John of God for a couple of months and while there remembered he abused her during therapy. Herself and her husband now saying that the €20,000 is compensation for a bad childhood and calling the father a paedophile not talking to anyone in immediate family but we all live in a small town with kids in same school.
Now abuse is a very serious matter but the fact that they got the cash, and I believe that was their sole motivation which is driving me nuts as we struggle too and would not have asked father a loan of a €50. Since all this happened we also found out that back in 2005 this daughter had worked in Irish Nationwide Building Society and advised father to deposit €20,000 there so he would get windfall when it was sold, mother has deposit book, but again I can't believe, account opened in this daughter's name (there was some fear around tax man here which is not good) and in May last year mother called to branch and was told account was closed, she nearly fainted as this was alot of money and branch wrote up book showing that daughter started spending this money within weeks of opening and you can match off the €3,000 withdrawals to her holidays with €11,000 for her wedding and €5,000 for her honeymoon this again proves how money grabbing and calculating she really was. Anyway I really want to see herself and her husband brought to account for all this and wonder is there any legal angle on this - I know cash into ac in her name is dead end but what about extortion for the recent €20,000 and is defamation of character a route? Really just would help me to see them pay. This is like something for Jerry Springer can't believe they could bring this on the family.

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Essentially this has nothing to do with you. The father should see a solicitor as there are several issues here. Forget the 20,000 in the bank account, it seems irrelevant. She cannot decide to keep a loan as compenstion. Defamation would be difficult as the facts as you put them seem to suggest several defences not to mention that the extent of the publication is minimal. If the father, not you, is concerned about this situation he should contact a solicitor immediately and they will be able to give competent legal advice on what is obviously a sensitive family situation.