Help! Can this person go to jail for credit card fraud?

Back in 2009, my husband allowed my sister in law to open 2 credit cards (Paypal and Toys R Us)in his name. She agreed to pay ALL payments. He only allowed her to do this so she could make sure my nephew (her child) would have a great Christmas. He went with her to the 2 stores and applied for the cards.
A few months later, she claimed she needed his social security number to pay a payment at one of the stores (which we later found out was a lie).
We checked his credit report a couple days ago and noticed there was 2 accounts opened–Walmart and Maurcies with negative balances. One balance is over (Walmart) 0 while the other is about (Kohls) 0. We NEVER gave her permission to get these 2 cards. Also, the 2 accounts my husband allowed her to get, while one is fine (Toys r Us), the other (Paypal) is deliquent and is over 0. This has greatly reduced his credit score.
So my question is, could we get her for fraud? If so, which cards?
First off my husband is not an idiot. He was being VERY nice because at the time she could not afford to buy her son anything for Christmas. (She was in between jobs). He thought he could trust her; I mean she is family after all.

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