Sexual abuse on a 5-yr-old?

A friend's little girl has started rubbing her private areas on objects. When asked, she says she "saw Mommy do it, she wanted me to watch" and when asked why, she says for [mom's boyfriend]. She also wakes up screaming at night and claims she doesn't know why. To elaborate, her mother left her father for several other men and has become addicted to drugs. She gave up custody of both kids and rarely sees them or calls them now. Rumor has it that when she was in their lives she taught this 5-yr-old to pole dance and made her 7-yr-old brother watch, and that she often had "relations" in front of the kids while she was still married to their father. When we ask the girl anything about someone maybe touching her or were she learned how to grind on a pillow, she either clams up and won't talk, or she beats her head with her hands and says she can't remember. She is terrified of going to her bedroom alone, and she won't go to the bathroom alone unless she is at home with her father and stepmother. She also says that a man (we know his first name) was mean to her but she won't say how, and she says that her mother left her alone with a few men several times, but she won't say what happened. Her mother and one of her boyfriends locked her in a closet while they had "relations", again, while she was married to the child's father, or so she has mentioned. My friend, the child's father, is in denial and says nothing is wrong. I think he may not want to admit that something so terrible could happen to his baby girl, or that he doesn't want to see the mother of his children for the monster she really is. Is it likely that she was sexually abused or am I taking a terrible, dramatic situation and thinking it is worse than what it is? There is evidence that something immoral happened.