Ideally, the best thing to do is keep your child close. I don't mean smother them or shadow their every move. I'm talking about putting yourself in the position of being point person.
1. For a week or two (or a month!), schedule fun activities that keep your child busy with family or structured activities that don't involve this friend. This will start your child looking to you as their compass instead of this other kid.
If the situation is really bad, consider taking your child out of school for a week and go away with them, somewhere away from friends and Facebook. Take away their cell phone. Kids can only have one attachment, and it's either going to be you or their peer group. Make sure it's you.
2. Make the sacrifice to know where your child is during those in-between times, like after school or before the basketball game. Unstructured time is bad news.
3. DO NOT criticize the other child at home. This will just make your child have to choose loyalties and anything you say could get back to the other family, which is sure to cause unnecessary drama.
4. On the other hand, feel free to say, "I know this child is making some choices that could get you in trouble later, and I know you don't want that sort of mess. Please feel free to use me as an excuse if you need to get out of a tricky situation."
5. Be supportive of your child, even if you're fearful. Say things like, "You have great instincts. You make really good decisions." So many kids are silently praying for their parents' approval. Don't make them hope. Say it. Live it.
6. Do not shame your child or threaten them if they are in contact with this friend. Your child needs your support and love, not fear or bullying. Again, don't make them choose between you and their friend.
7. If this friend is in your child's class at school, talk to the teacher and ask if they can keep the kids apart when possible.
For more on dealing with kids who are attached to their peers instead of parents, I highly recommend Gordon Neufeld. His work is gentle, powerful and downright amazing. He's all about connection, not control. Search for his videos on YouTube. http://neufeldinstitute.com/