Bio mom says daughter is lying Update

My husband's at work so it was my job to bathe my step daughter and our son. He's 6 months. She had just come to see us today. I decided to kill two birds with one stone and bathe them together. His daughter is 5 and our son is 6 months so I didn't see an issue, neither did my husband. She watched me bathe her little brother and pointed to his penis and said "Milo(her step dad) tried to put that in my sweetie(what she calls vagina)." I was shocked and asked what she meant and when. She said "It didn't fit so he used his finger." I asked when and she gets distracted and starts playing in the water. I get her dressed and again ask when did he do that and she said "Christmas." I called my husband but he didn't answer. I didn't know what else to do. I'm sorry if this seems like I overstepped but I called her mom and told her what was said. Her mom just said "She lies a lot. Don't listen to anything she says." I told her I don't think a 5 year old could come up with something like that, but mid sentence she hung up on me. Husband still isn't answering because he's at work. I understand her mother knows her daughter better than me but this doesn't seem like something a 5 year old could come up with without being exposed to.

Update: I am so sorry I haven't updated on this. It's been a lot. I finally got in touch with my husband and he started losing his shit when I told him what was said. We did get the police involved. There is an investigation going on but nobody has been arrested. They told the mom she had a choice. Either her step dad had to leave the house or her daughter, so she sent her daughter with us. We have emergency custody of her. Her mom yelled at me for ruining her and her husband's life, so my husband stepped in and told her to back tf off. He's getting a lawyer to try to get permanent custody. It was honestly so sad because after the police left my step daughter asked me "Am I in trouble?" I told her no and to always tell if anyone does anything like that to you. Also with her calling her vagina "sweetie" that was something her mom taught her. I want my son to know the proper name for his penis and I would have taught her, but I figured it would just piss off her mom so I left it alone. I'm going to teach her for sure now. Thank you guys for the help and sorry again for the late update.