I haven't read replies, but I just wanted to say, first, that that is just heartbreaking and I'm so sorry your nephew is in this situation, and sorry for your brother, too.
I also wanted to mention my CPS experience. I called them in a situation I felt was fairly dire. A friend of mine told me that she was *seriously* beating her husband up. Like, she had literally blinded him in one eye in ten years worth of beatings. And she was saying things to me like, "my son is pushing my butttons now just like his father" and also she told me that she was beating her husband which I think was a real cry for help. So I called CPS and they did a big fat nothing.
They acted on the phone to me like this was a big deal thing and that it was going to go on the 24 hour fast track, etc. And then a big fat nothing. They did interview her then 4 year old son at school and he told her and she freaked out and I think that may have been a good thing for the family. Kept her on her toes at least for a while I'm sure. But they never went further with it.
So, before you call I'd think a little about how it'll be if they don't do anything. Will your brother ever talk to you again? Will you feel like you aren't able to help some other way now that he won't let you come around? etc... You may decide that it's worth the call. In my case it was. I still, over a year later, miss my friend and her son A LOT.
But in my situation there was no way we could still hang out. We had same aged children and there was no way I was going to keep exposing my child to her family situation once I knew what was going on there. And just the scare did seemingly do a little something for them (I was told that they consulted a lawyer who told them they all needed to be in therapy, and some other stuff). So I think it was best that I called. It may be best for you to call too, but I'm just saying think about all the possible outcomes beforehand and don't assume, even if you say he is hitting your nephew, that they'll do anything. I'm not even sure it is stricktly against the law to hit and shame him, unfortunately (anyone know?). It may be that the behavior you're talking about is totally above board as far as CPS is concerned. I found your story heartbreaking, but they may not.