Fundamentally this is an issue of discretion and not over reacting. I'm not aware of any legal obligation to report naked pictures of children but would definitely feel a moral obligation to report anything i was unhappy with.
However i would speak to the client and explain my position. If the boot was on the other foot i'd probably be peeved that the situation was occurring and that suspicion was aimed at me but wouldn't take it personally. We should be glad that people have their eyes open, all be it misplaced: any criminal taking photos of an act they had committed especially on film must be as rare as it stupid. I can't see how destroying the original makes any difference, all in all it's a silly situation that should have been dealt with in a much better fashion.
The very worst instance would be to let it go and then realise that you had missed a chance to stop some form of abuse.