"I've never done anything inappropriate with Zahra," James Young told The Charlotte Observer.
Young said police cleared him and that he has met with no investigators since October, the newspaper reported Wednesday. His cousin, Timothy Young, also said the allegations are false and he also passed a polygraph.
James Young's brother was once married to Elisa Baker, Zahra's stepmother. Young lived across the street from Elisa, Zahra and her father, Adam Baker, in Caldwell County before the Bakers moved to Hickory.
An unnamed source told police the Youngs might have raped and physically assaulted Zahra, who had lost part of a leg to cancer, search warrants unsealed last week said.
The Youngs have not been charged with any crime, but Hickory police declined to say whether they are still under investigation.
No one has been charged in the death of Zahra, who has been missing since Oct. 9. Both Elisa Baker and Adam Baker have denied any wrongdoing.Elisa Baker is jailed on obstruction of justice charges, however, and Adam Baker faced unrelated charges for bad check and missing court dates.