It is widely accepted that a 4 year old would NOT make this stuff up.
4 year olds know their "private" parts, have been instructed to tell mommy or daddy if someone touches near their panties. 4 year olds rarely, rarely, would make up a scary even like this.
I would guess that the 4 year old was very credible about what happened. When I was 4 and my grandfather didn't pay me for spelling a word right, I told him to write a check! So, NON, 4 year olds do know what is going on around them and what should not be done to them.