I need some serious advice *possible tw*hi

So a long while ago about 6 months my son went to stay with my sister her two kids and her new boyfriend and his son. My son came back saying " don't touch my penis. I like my penis." I thought it was odd considering he's never said anything like that before. My sister has watched him with her two kids before and never said that. The only thing that was new was her boyfriend and his kid... Well a few hours after that my son said I only liked two people at my sister's house. He named his two cousins and specifically said he hated the new boyfriend's son.

So I raised and eye brow to my mother about this who raised an eyebrow to older brother who told my sister and now no one is talking to anyone anymore. They cut my mom and me out of their lives. Well fast forward 6 months and my sister and Mom are talking again. My mom is staying with me because I just had surgery and she's helping me with my kids. While she's in town she is visiting with my sister's two kids. So my niece tells me and my mom that Kyle (the little boy I spoke of earlier not his real name) was humping her little brother. She wadded up her blanket and showed my mother and me what kyle did to her brother.

He was humping my nephew's face and then would get into 69 position with my nephew and do that humping thing. (not her words just saying this to get to the point of what she was saying). She also said he did it to my brothers daughter as well when she visits. Then later that night I'm drawing her a bath and she told me Kyle asks her if he could watch her take a bath. My mother saw my nephew rubbing my dogs penis and my nephew can't speak well at all. Btw sister's kids niece is 7 going to be 8 next month and nephew is 4 will be five in April Kyle is 8

A few more things my sister told my mom that Kyle's dad will sleep with him over sleeping with my sister.

As you can see I'm a little worried and if I talk to my sister about this she'll cut us out. I asked my niece if she told anyone and she said yes but my mom didn't do anything about it. Now i could talk to my nieces dad about this but idk if he'll do anything I'm not sure but he's very over protective of his daughter and I don't think my niece wants her mom getting into trouble. I thought if calling cps but idk if that'll do anything please help me I'm very worried that this little boy is taking advantage of my nephew or he is acting out shit on my nephew that's being done to him.

Who should I talk to? What should be my first step? I thought of asking my niece what she wants me to do but idk I've never had this happen before. I need advice on what I should do. Who I should speak with.

I just wanna make one thing clear. I don't care if my sister gets mad and cuts me out. How ever I do want to go about it the right way. My niece feels safe telling me these things so I can help her but if her mom cuts me out of her life again how can I help her. That's what I'm worried about. How can I help someone I'm not allowed to see. I get the dumbness of my sister's behalf I don't care about her couldn't care less honestly, but I love my niece and nephew like they are my own kids and I'll do anything to protect them, but I need ideas on how to protect them. I'm only an aunt.