You're in a difficult situation as I don't have a younger sibling, my advice may not be the greatest. If I were you, I would tell your parents...it appears she is making decisions that could be potentially harmful if not deadly to herself (meeting someone off the internet doesn't sound real bright for a 16 year old). Your parents need to be aware of the fact that she is being deceptive..ignorance in this case is not bliss.

As for telling them and her doing things leading to more deception, she is making those decisions and will eventually have to live with the consequences. Your parents have the right to know so that they can make every attempt to persuade her against those things, but in the end she will do it whether or not they know.