Here are my concerns. I don't want to rush to hang the man but there are a few issues that need to be addressed:
Your sister-in-law has known him for 5 years. So, your niece has known him since she was 4 years old???? There haven't been any concerns? Has anybody ever been concerned before, other than he rough houses with the kids? I'm guessing he's been playing with the kids for a while. Just thinking about get-togethers that we have, we have a couple older (male) cousins and two uncles who love to get wild with the kids. I've never thought it was strange. With that said.....
I am concerned that the sister rushed off to court to get married. Also....
At that age - no man should be wrestling with a young girl! From an honest man's perspective - it's sad - because, in my husband's case, he has always rough housed with the kids and, suddenly, BAM... can't do that! They are maturing! However, way back when I had to address it with my husband, he really felt sad that this part his life with his kids was gone but he knew I was sooo right and that "type" of play ended immediately! Again... an honest man's approach!
Yes, you have to speak with your sister-in-law, so that she can talk to her daughter's step father (NOT just her husband - which is how she is viewing it!) , from the perspective that "the girls are getting older and it really isn't appropriate to wrestle with older girls who are maturing". He also shouldn't be putting himself in the position of being alone with them anymore... just isn't smart for ANY adult to ever do that! They are not toddlers anymore. If he IS an honest man... this would prove to be a wake-up call. No one should be accusing him of anything and he shouldn't feel like you are.. just an observation. (however, he will know after it that he's on alert with the family!) Is he ever home alone with your niece afterschool? I would check that out.
Could some of this be manipulative on the part of your niece... yes, and that should be considered. Rather than you or your mother-in-law rallying against this man, with minimal facts, if you instinctively are concerned ... run a background check on him. Relatively easy to do nowadays! Might cost a little money but even simple checks are free. This is a site that everyone should be aware of.... I've used it many times. Yes, it's scary!
http://www.familywatchdog.us/
Also.. depending on the county that you live in. This happens to be Cook county/Oak Forest Zip Code but you just put in the zip code that you want, or the county.
http://www.isp.state.il.us/sor/offenderlist.cfm
It's good that your niece talks to you and to her mom. I'm hoping you can keep that line of communication open. You can't accuse him without causing major dissension and cutting off access with your niece - if you think there really is a concern, put your ducks in a row. You certainly don't want to cut off access with the niece.