Ok so first off I want to apologize if this isn't in the right forum area but I wasn't exactly sure what this question counted as. To make a long story short, I was in the Bazaar, added a girl as a friend, wasn't aware of her foul use of language ( obviously around the filter ), she used it again but we were alone so I didn't report her so she wouldn't know it was me, I just wanted to know if I could get into trouble for not filing the report as soon as I saw her use it. By the way, the question is mainly for an administrator to answer as they'd obviously know the correct answer, thanks for anyone else who answers though.
When you report someone, or you are reported, a message is sent directly to Mr Lincoln that includes the chat logs of everything that was said before and after that report.
Mr Lincoln then reads the log and assesses the situation. He determines how bad the offense was, looks up prior offenses for the reported individual, and based on that assessment he issues sanctions (such as muting or banning) and sends an email to the offending account explaining the violation and the sanctions.
If the report was falsely made, that is determined as well, and the player who made the false report is investigated as to whether or not they have made previous false reports. False reports are just as egregious as valid ones, and similar sanctions can be levied against repeat offenders of false reporting.
Everything that a player enters into the chat window is logged. These larger chat logs are also routinely checked for those infractions that are not reported.