。
She said that stealing is wrong.
Literal
Stealing [contrast-は] not-good [quotative-と] said.
盗みは良くない uses は contrastively — 'stealing, as for it, is not good' — setting up stealing as the topic being judged. 良くない is the negative of 良い, a slightly more formal negative than よくない written in kana. The whole clause is quoted with と言った. A straightforward example of reporting someone's moral judgment.