He is asking her to sleep with him in exchange for $500 or he will post the video of her. He also has made threats to her. She has not reported this because she is either afraid it will get out or she might be in trouble. I've told her that's not the case. She was drunk and in a a bad emotional state and they convinced her to take ecstasy.
Better yet: Why are you here reporting all this and not your friend? Where is she? It is her problem, not yours.
And why has this not been reported to the police?