The problem is that the code is in the wrong hook.
The hook for the plugin needs to be changed to report_send_complete
It's trying to send the PM before the code has defined what $message and $subject is!
Keep in mind, changing it to this hook location will send the PM correctly, however, it will also send an email.
Unsure if the desire is to remove the reporting emails or not.
Great hack though!! Installed!!!
EDIT - ah bugger... my fix works to send the pm... but the email is all screwy because it has bbcode in it

I'll keep fiddling with it and see if I can help out ziki