This discussion may contain spoilers!
Nerissa: Faith decided to get some...leverage. She stole a picture of Crane and Lily together.
Who took the picture? Was Lily glamoured as Snow White in the photo? Was it the one Bigby found in the Open Arms?
Nerissa: The minute Faith stole that photo, we had dirt on one of the Crooked Man's allies. If he found out--!
Yeah, so what? The Crooked Man had practically everyone in Fabletown in his pocket, in the sense that many owed him because he was so generous. Who would be able to say anything, or even stand up to him for that matter?
This doesn't make much sense to me, but then again, I'm almost certain I'm missing something. Something that makes this blackmail a legitimate threat/concern to his reputation or his secret organization or whatever.