Again, I think that the passionate responses bely only the fact that we all care so very much about the kids we care for. And that's a good thing!

If indeed I knew for sure that she was in fact operating illegally, I would absolutely report her. 5 kids plus your own is a VERY reasonable amount of children to have under your care. In Alberta, our regulations are a little different and we aren't allowed to have as many as that. I understand that there are different scenarios, and we don't know ALL the details. But the fact is, those regulations are in place for a reason. I may be willing to bend the rules for ONE or TWO extra children, because my oldest children don't require my "care" anymore, but they still count in my ratios. But that is as far as I would take it. And even on those days, I usually get a second pair of eyes around, like my husband.
We have to watch each others backs, but we also have to watch out for the kids most importantly and our industry as a whole.