Slander?

Here's the deal. Back in 2002, I stopped contact with my older sister(from my dad's side of the family) due to too much nonsense going on. That was probably the biggest mistake of my life. Since then, she and her mother(who's in her early 50's) have done nothing but spread vicious lies about me and my family. It started out with stupid things such as, my mom was dating a family member of theirs and he was no good for my mom(as if they care). Now it's to the point where they're telling people that I was arrested for soliciting *** from an undercover police officer. I've never(ever, in my life) been in trouble with the law, and especially not for soliciting *** from an undercover agent. This was all printed out in a letter to my father(whom I have a bad relationship with) and he sent it to me. Now, I know he couldn't have done it, for many reasons. 1) He's in prison, with no access to a computer. 2) This woman typed her name, address, and the date she wrote it on the letter, and even signed one of them. She went into detail to my father about how she obtained this information, but none of it is true nor does it make sense. She claims my sister got the information from someone who knows me, who in turn gave her my phone number. My sister claims she called my house(phone records can PROVE otherwise) and my boyfriend(I'm single) told her I was arrested for soliciting an undercover police agent. She then says, that she called the county jail here, and I was, in fact, in jail with a $2000 cash bond. Again, none of this is true. I'd even take a lie detector test, let them search my records, anything. But I want to know what can be done to stop this nonsense from happening. Is there anything I can do?