Your sister in laws cat has to go! He is not only stressing you and your
cats
(which can result in major behavioural problems for them), but he is
obviously
stressed out as well! Rehousing him is the only answer. If that is not
acceptable,
then you will have to keep him seperated from the other cats at any rate, or
keep him on
sedatives for the duration of his stay (which should be a last resort in my
books). I wish
I could tell you otherwise, but a vet will give you the same answer.

-Silver
"I love cats because I enjoy my home; & little by little, they become its
visible soul."

- Jean Cocteau 1889-1963.

I have a similar problem, although my male cat isn't causing quite the same
amount of havoc. He wants to play, gets all excited, and uses my female cat
as his pretend prey.  It looks like he's trying to attack her, actually he
is, but he's playing. She doesn't like it so she growls at him and they end
up in a fight because he won't stop. My Vet said that he is frustrated
because he's not getting enough play time or not the right kind of play. He
needs to play in a way that allows him to get out his aggressiveness. He's
an indoor cat so he doesn't get to hunt like outdoor cats do. So he keeps
"hunting" and attacking my female cat.  I spray him when he's misbehaving
because I can't play with him all the time.(whenever I spray a cat I use the
same command of "no" and never spray more than twice, if spray doesn't stop
them then you must physically stop what they are doing) And separating them
is very important, I'm told. Once he attacks, he must be stopped, EVERY
time. Lack of consistency allows the behavior to go on.

So, once he attacks Simone (my female cat), they are separated. I don't play
with him right away after that because he will begin to view attacking
Simone as how to start play time. But within about 10 minutes I'll start
playing with him and the others (playing with everyone together can help
ease tension and raise spirits, but don't force it). The toys best suited
for prey and hunting play are those that a cat can sink it's teeth into once
they "caught" it. I like to use fur or feathers at the end of a string
attached to a stick or wand. That way I can run the feathers on the ground
similar like a scattering mouse and they go nuts. All this has helped a lot.
I think play is very important. Punishment and banishment alone will not
solve the problem, it just makes the cat more frustrated and in the end,
more aggressive. I hope this helps you.
-Deeziner