If you really want to get to the bottom of this to know that you've done all you can do to ensure the safety of your nephew... here's a few ideas.
I don't know what the privacy laws are like there, but you can always try to:
A) Call or write (or both) to the university where he went. Ask if there's any disciplinary files on him for lewd behavior. Ask to talk to the university's legal department or president's office. Tell them that Jim is working with children and that you are concerned and ask if they have any information on file that would raise concerns for them that he's working with children.
B) Follow up on that "inappropriate behavior with a female student." Write/call that school. Ask if Jim was fired/dismissed as a result of it. Depending on privacy rules, you could ask the school to contact the girl's parents to tell them that Jim is working with children... and if they don't like that idea, then they can contact you and together the lot of you can reach out to Boys Brigade.
I think it's tough to use something a person did at 10 years old against him unless there's other evidence to show that it's a continued pattern.
Good luck, and keep us posted.
But he grew old, this knight so bold / And upon his heart a shadow / Fell as he found / No spot on the ground / That looked like El Dorado.