Oh SB, I'm so sorry you have to deal with this now.
Has niece by any chance been seeing a counselor who deals in "repressed memories"? Is this something she has just now remembered in therapy, or is there any evidence that she ever told anybody earlier? If this is something she is just now remembering with the help of therapy, you need to search the web for the "False Memory Syndrome Foundation" - a very active American group of people who have been victimized by their loved ones receiving this junk therapy.

What is niece's psych diagnosis? Bipolar or substance abuse? And is there any way you can speak with her therapist - let them know that there is no corroborating this account and you suspect financial motives?

And finally - ouch, but here goes - you are absolutely sure there's no way this could have happened? We've all been surprised by what our Ses were capable of - no red flags that you are ignoring? (Sorry, CJ, but I have to ask).

Document EVERYTHING, every conversation, every detail - and I'd consult an attorney pronto.

Ellie