he masturbated with a stuffed octopuss..........he's a fucking lunatic, get away from the family before he rapes you, and your pic gets on sixty minutes before they find your partially decomposed body in they're basement where he has been raping your lifeless corpse...
well this seems like a problem an professional has to solve. i suggest you are nice to him and treat him well because he clearly struggles with something. i think he`ll find out of it himself but it may take years...
And his parents already have to be aware of it. So they are either in denial, or are doing things that people are not aware of.
There is only one thing you can do, and that is call in the law on the sexual abuse. They will look into things, and if they find evidence of sexual abuse, and there is someone willing to press charges, he will be arrested.
I am going to say something that I don't even like saying
But it sounds to me like this kid is seriously disturbed and needs help ASAP.
I once went to a seminar on pedophilia before volunteering somewhere, and at least one of the actions you have described fits the bill for someone who is likely to become a pedophile older in age. (the molestation of his sister)
I would recommend reporting what is going on. but don't tell his parents it was you who did it. report it anonymously.
As much as that sounds like a bad thing, it might actually need to happen for them to open their eyes and realize the seriousness of this situation. Like what others have said, if he's doing things at this age, then who knows what he will do later on. This screams all types of warnings.
Act now rather than hope things get better. As sucky as it may be with the possibility of the family falling apart, you or your boyfriend NEED to go to someone else that can do something with this situation, because based on what you've typed, all the parents are doing is putting their fingers in their ears and going "LALALALALA NOT LISTENING".