It is proven in Saheeh Muslim (49) that Abu Sa’eed al-Khudri (may Allaah be pleased with him) said: I heard the Messenger of Allaah (peace and blessings of Allaah be upon him) say: “Whoever among you sees an evil action, let him change it with his hand (by taking action); if he cannot, then with his tongue (by speaking out); and if he cannot, then with his heart (by hating it and feeling it is wrong), and that is the weakest of faith.” 

Al-Nawawi (may Allaah have mercy on him) said: 

With regard to the words of the Prophet (peace and blessings of Allaah be upon him) “let him change it”, this is a command in the sense that it is obligatory according to the consensus of the ummah. Enjoining what is good and forbidding what is evil is an obligation according to Qur’aan and Sunnah and the consensus of the ummah, and it is also part of the sincerity (naseehah) that is the faith. End quote. 

Sharh Saheeh Muslim (2/22) 

The Children of Israel would see evil but keep silent and not denounce it, and that silence caused them to be cursed, as Allaah, may He be glorified, says (interpretation of the meaning):

“Those among the Children of Israel who disbelieved were cursed by the tongue of Dawood (David) and ‘Eesa (Jesus), son of Maryam (Mary). That was because they disobeyed (Allaah and the Messengers) and were ever transgressing beyond bounds.

79. They used not to forbid one another from Al-Munkar (wrong, evildoing, sins, polytheism, disbelief) which they committed. Vile indeed was what they used to do”

[al-Maa’idah 5:78-79] 

Based on that, it is not permissible for the one who sees an evil to keep quiet about it when he is able to denounce it and change it. He should start with changing it with his hand (by taking action) if he is able to do that, such as if he is responsible for the one who is doing the evil and has some authority over him. If he cannot change it with his hand, then he should denounce it with his tongue (by speaking out), by enjoining what is good and forbidding what is evil, and by advising in the way that is best. Denouncing it verbally also includes telling those who are able to put a stop to this evil, and he must try hard to do that. If he is unable to do that, then he can avoid sin by denouncing it in his heart. If he falls short in denouncing the evil in the way that he is able to, then he will be a partner in sin with the sinner. 

If he has tried his best and done his duty of enjoining what is good and forbidding what is evil, and the sinner does not respond, there is no sin on him, because Allaah says (interpretation of the meaning): 

“O you who believe! Take care of your ownselves. If you follow the (right) guidance [and enjoin what is right (Islamic Monotheism and all that Islam orders one to do) and forbid what is wrong (polytheism, disbelief and all that Islam has forbidden)] no hurt can come to you from those who are in error. The return of you all is to Allaah, then He will inform you about (all) that which you used to do”

[al-Maa’idah 5:103].

Shaykh al-Shanqeeti (may Allaah have mercy on him) said: 

The one who denounces evil according to his ability is safe from this sin, but the one who approves of it and keeps quiet about it is a sinner like the one who does it. End quote. 

Adwa’ al-Bayaan (1/467). 

You have to advise these people, first of all, to fear Allaah and to refrain from stealing the property of others, and they have to return what they took previously. If they refrain, then you will have done the right thing towards them and the owner of the property. But if they persist in what they are doing, then you must inform those who can put a stop to what they are doing, even if you tell the owner of the property himself. It is not essential for you to make it known that you are the one who is telling on them, rather it is sufficient to send a letter – for example – to the owner of the property and tell him what is really going on. It is preferable for it to be accompanied by documents that prove that what you are saying is true, so that he will take the matter seriously. Thus you will have fulfilled your duty and saved yourself from sin.