I think we don't have enough information to decide either way. The guy who visited his friend's house seems to think everything wasn't above-board there. Maybe he's wrong, but the responsible thing to do is follow up on it with the friend, promptly. It doesn't need to be an accusation, just an "I noticed something odd; can you tell me what's going on?" type thing. And if the explanation isn't satisfying, you get the authorities involved, immediately.

Regardless, just because something is culturally acceptable (like Lola's slavery back in the Philippines), it doesn't make it right.