Surely the letter itself would have been in your sisters name (the account holder)? If so then why did you open it??
If it did go to court it would also be in your sisters name..
What you need to do is to print out all the news stories about people getting wrongly accused, all the professional advice and show them to her with the ACS letter..
You might find that she'll cancel the internet
but at least she knows what she could be facing as in the end it's not you who would be facing the courts