Back Yard Breeder question

I was chatting with a neighbor today, and she mentioned that another neighbor just got a "Pure breed" Lab for free from Arizona

When asked when they were going to get the lab fixed - the new owner said "Oh we are going to breed her... we can get $1500 a puppy"

I can not stress enough that these are the last people who should be breeding anything. They don't take care of the 2 pets they have now. They let them wander the streets. I didn't hear the story first hand - but my source saw the new puppy and spoke with the owner.

Is there some kind of gov't agency or department that can step in if they get an anonymous tip about a potential irresponsible breeder? Does anyone regulate this?