This one is tricky.

Let me state that I am American, and while I don't see what that has to do with anything, out side of the legal stuff, it seems important to you, so, take that into consideration.

It's hard to tell where to start. I would start by explaining to my child that these things happen. That not all people are good, and that not all people are bad. Sometimes with think someone is our friend and they turn out to be a bad person. I would also stress that because a friend did a bad thing, that doesn't make them a bad person all the way around, and it doesn't make them not a friend. I would stress that a person can be a friend even if they do bad things or are a bad person, and that is one of the most complicated things about friendship. I would also stress that she (Angela) needs to think on it, and really decide if she want's to remain friends with someone that has such a different out look on things. I would try to stress, using other real world examples, that people's morality is often different and that while Angela thinks what happened is a bad thing her friend may not see it as a bad thing. I would stress that dealing with these types of complications are part of what it means to be an adult, and that she is becoming an adult.

That should address the "she did bad stuff" part of the problem. Next up is the betrayal. "My fiend has cancer" would really stress most of us. We would worry about them, and spend some time wondering about their future. I would try to explain that she (Angela) needs to really consider if she can trust her friend any more, and if not, how are they going to continue to be friends? I would tell Angela some stories from my past, where I had to deal with similar betrayal. The general idea is to let her know she is not alone in this and it happens to all of us. All of us had to deal with something like this (the loss of trust), and Angela needs to know that. She needs to know that it's not something she did or some fault of hers, but just part of being an adult.

Next up, I would (maybe you would not) stress that she needs to do the legal thing. Friend or not, she has a legal responsibility to report the information to the police. This will be stressful for her, but important. It will create a "break" of responsibility. A clear line of "Look, your my friend, but I can not support, and will not support you breaking the law and defrauding people." This will allow Angela, in time, to be able to say, "I did the right thing, even if she didn't." Everyone feels different about this part, and that's ok. You will have to decide what's right for your family. I believe in "The only thing necessary for the triumph of evil is for good men to do nothing. (Edmund Burke)" but you may take a different approach. The important thing is that Angela feel that she is doing what is right, even though that may be against the friendship. This will be hard for her.

The last part if this is "She said she's had nightmares and flashbacks about this since Tuesday." That is pretty troubling. First you need to decide if that is a real thing or not. I doubt "flashbacks". That may be being over dramatic. Anyone that has real flashbacks because of something like this needs some help adjusting and it may be time to see a psychiatrist. Remember that flashbacks are a symptom of serious mental health issues. That being said, shes 14 and probably just doesn't know how to describe what she is feeling and has picked a word that she has seen on TV or in books. If you decide that she is having real flashbacks then do see a therapist. Nightmares would be much more understanding. We dream to learn. As this is the first time she has had to deal with this, it's normal that she have dreams about it, specially while she is trying to figure out what she should do and what it means.

Unfortunately with nightmares, there's not much to do. Make sure she goes to bed happy. Amp up the new experiences so that she has more to process in her sleep. But remember that dreaming is a natural way for our minds to figure out stuff. Nightmares are just bad dreams. So this is not surprising. I would tell her, that it's normal. I would share with her a time that I had nightmares, and explain that there a natural way to figure out things. In the morning, I would try and talk to her about them, and more importantly how she feels about what happened in them. She is a teenager, so that may not work, but it's worth a try.

When it comes to hanging out with Laura, take a break. No matter what is decided about continuing the friendship, taking a break is not a bad idea. I would go with, internal to the family, "While you decide what you want to do about your friendship with Laura, we will just take a break from them. No harm in that. Friends take breaks at times." I would try to emphises that it's Angela's decision, and that you will support her either way. I would also stress that you have to make decisions as the parent, so there may be some new restrictions no matter what, but that you will support Angela's decision either way. You need to be careful not to turn this into "Wow I wish we could hang with Laura's parents but noooo you had to go and make x decision." While you may never actually do that, you need to make sure you don't come off like that. The idea is to support her decision regarding the continued friendship, but also make sure that Angela and the rest of your family are safe.