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I really don't see how you can get Mike in trouble without getting M right in there with him. Any guy that would shortchange a little old lady like this probably can't be counted on not to keep her name away from the cops if he gets busted. After all M IS breaking the law, although she may not realize it.
At this point, I think that your only choice is to keep your head in the sand and pretend that you don't know anything. Mike isn't going to come up with the extra money, and if M isn't going to call him on it, then he's probably going to keep shortchanging her. The only other thing that you can do is tell her to keep her medicine to herself and stop selling extras to Mike, no matter how much she needs the cash.
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin
"There ought to be limits to freedom." - George W. Bush
"We have met the enemy and he is us." - Pogo
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