Property line dispute with neighbor, any advice?

A friend of mine is going through a rough patch with her elderly neighbor. My friend is looking to sell her house, and had it appraised, which raised the issue of property lines. It turns out her neighbor's fence is on her property encroaching several feet and after the surveyor's and town records confirmed their property lines, she has politely spoken with the neighbor about moving or removing the fence. The neighbor has not cooperated and has begun harassing the family, saying she'll sue them if they move or damage the fence and that it is on her property, even though the surveyor declared her wrong. The neighbor also had the property evaluated and found that she was wrong, but still continues to remove surveyor flags and items that are not hers from the property line. My friend is at her wit's end. She has tried to reason with her to no avail, and even tried to have her arrested for trespassing and property damage. The police said there was nothing they could do as this is a civil matter. Should she take it up with the planning and zoning board? Who could she contact to enforce the boundaries and get this crazy woman to leave her and her family alone? What steps should I advise her to take? And how should she further deal with this woman, if at all?