I’m not sure if it’s good advice to the OP, but I know what I’d do: press charges.
Anything short of this would cause me to feel a measure of responsibity for the (IMO likely) future crimes of the sister. And the stress this step will put on the engagement seems appropriate: if the relationship survives, it’s a good sign for the future; if not, best to find out early.
Now I’m picturing a war room with charts and graphs and a tabletop map with little infantries and ships. And a sister with a pointer at a huge whiteboard:
“Okay, looks like Betty Sue’s been outed. Billie Sue, you’re up next with [riffles through secret file]… a sick pet. can you get a dog by Thursday? Then Bobbi Sue’s due to ‘borrow’ his car and get carjacked over the weekend.
Oh, Betty Sue, here’s your fake passport, your new identity in Panama’s all set up.”
When I was in college I used to work in retail to earn money for rent, grub, and textbooks, and one of my co-workers was a hopeless romantic who spent probably half his monthly income (maybe more than half) on strippers. Not just on the strip shows but getting to know them personally and getting sucked into their drama. He bought them mobile phones, paid their electric bills, their rent, and other shit, believing it was friendship with the potential for something beyond that. Their stories, their reasons for using him, changed all the time. It didn’t matter. He kept eating it right up, and kept getting hosed. I realize he’s not visiting strip clubs, but I wonder if there’s not an element of this with the OP.
I don’t know anything of the OP’s romantic history, but he seems a little blindered and naive. I for one would be raising serious questions about how the SIL obtained the ATM pin from fiancee’s (presumably locked) phone. I can’t come up with a scenario for how that could be done, or even how or where one would store a pin on a phone.
Thanks for posting this. It’s been eating at me from the git-go but I didn’t want to be that person. I’ll cover for you next time. 
Folks from dysfunctional families and/or dysfunctional parts of society are all used to widespread dysfunction being their norm. Folks from ordinary “middle class” upbringings may have their personal and family dark sheep, skeletons in closets, weird uncles, insane cousins, etc.
Somebody from the latter group may be really, really hard pressed to grok just how much “fun” can be compressed into a given dysfunctional situation from the former group.
Our OP may be shocked, genuinely shocked, at just how big the underwater part of this crazy-berg is. It’s easy to minimize what you encounter as being a one-off aberration well away from their norm when it’s actually just the tip of the crazy as usual dysfunction-berg.
I’ve wondered about how she got the PIN as well. My hunch is that the fiancee gave her that information, maybe not with bad intentions but bad outcomes nevertheless.
I’ve done a post-nup and a pre-nup, and although, as I’ve said, IANAL, based on research and discussions with actual attorneys, marrying and keeping separate financial accounts does not protect your assets in case something goes really bad.
Yeah, after being married for 30 years my wife still expects ATM receipts because she likes to check off the transactions at the end of the month.
That’s not even on the radar for notable behavior in their situation.
Ok, I just read almost 200 replies and I don’t think anyone has mentioned this yet:
The OP took money from a retirement account to purchase depreciating assets. Dude, DON’T DO THAT. $2,500 is a drop in the bucket compared to what this move will ultimately cost you.
My guess is the OP will never get a red cent of his money back. It’s all gone, even if SIL really has a change of heart. Whatever else happens, he can reckon on writing it off.
True. But the OP is a young person. Assuming he’s USA, he can’t just withdraw money from an IRA or 401K. At least not without swinging tax penalties.
So I suspect he really meant he withdrew money from a non-qualified investment account he considers as his “retirement funds.”
At that rate, every dollar he spends on groceries every week instead of investing in that account is insanely expensive in the out years.
Be interesting to know the real story.
I’m guessing it’s not a coincidence that this theft happened just after transferred a lot of money from his retirement account to his bank account. Likely the info got back to the sister that there was a lot of money in the bank account and she decided to act. There’s a lot of ways the sister could have found out. It would be worth thinking about how she might have found out. (This is just supposition on my part. Maybe it really was a coincidence that the one time the sister decided to steal the ATM card just happened to be when there was a lot of money in the account.)
You’ve never heard of the Shaggy defense?
Not to be confused with the Asoh defense.
Thought I’d add a little update here:
I checked my account Friday morning, because it’s payday and I always look to make sure there were no issues.
There was a cash deposit into my account of $1500 done this past Thursday. I had the bank verify the deposit was valid, and that the bills were scanned to make sure they were not fraudulent (which I believe is SOP on cash deposits, anyway, where they use the little pen or scan them through a safe).
According to the bank, everything appears to be legitimate. It seems that she’s made good on her intention of making things right.
Of course, not even the fiancée has the new PIN, and I have my card flagged to “check ID” for any credit transactions.
Because I’m not stupid. Maybe a little naive, but not stupid.
Well, I was clearly wrong about this whole thing. It’s a bit curious that this was made as a secret deposit to the account rather than F-SIL contacting you directly. But… you were made whole, and now know to be cautious about your future in laws.
Is there a bit more to the story, or … does it actually appear that somebody made good ?
To me, it would still matter who. If it’s a family member covering for the felon, I’d want to know that.
YMMV, of course.
That was my thought too. There’s more to it than just getting the money back, or at least it would be for me. As you say, YMMV.
Oh, I’m not looking a gift horse in the mouth, but I’m also going to get the security footage on this to see exactly who made the deposit
I’d be awfully curious how that deposit was made. I don’t lie awake at night worrying about strangers putting money in to my bank account, but I always assumed there was some tracking or safeguards. If the deposit was done in-person, or by wire transfer, then the depositor would need your routing and account numbers. If it was done at an ATM, then the depositor must still have access to your card and PIN. I’d be worried that someone still knows more about this account than they should.
Also, if your sister-in-law made this deposit, wouldn’t she want to let you know? Kinda like the doomsday machine in Dr. Strangelove, the whole point of making amends is lost if you keep it a secret.