VespaElf--I'm appalled by the rudeness of the new but now vanished poster, but I did want to answer your very important question. Lying and vindictiveness are very real disorders of childhood. They fall under Conduct Disorder in the DSM-IV for children. After the age of 18, they morph into Anti-social Personality Disorder. They are typically under the umbrella of Severe Emotional Disturbance in the educational arena.
To play devil's advocate for a moment, it is not unheard of for children to engage in "crazy" lying nor to be vindictive (also a component of Oppositional Defiant Disorder). If this little boy is diagnosed with either of these disorders, it is highly possible that he has a history of lying. This type of lying is easily sorted out, though, by professionals who work with these kids.
We need to remember, though, that just because a child lies frequently does NOT mean that he could very well be telling the truth in this case. I doubt there would be an arrest nor a removal by DHS is there wasn't quite a bit more to the story--as well as the collaborating story of the sibling.
FWIW, there's a huge difference between the "tone" of a lie about a Dad having a big airplane which flew a child to Disneyland last year and a disclosure that "Dad touched me".
Remember, a person can make the poor choice of selling his/her body and still be the victim of a rape. Each disclosure/crime must be examined individually. I have faith this will be done thoroughly.