Sounds like David O. Russell truly is flirting with disaster.
According to a police report obtained by The Smoking Gun, Russell's transsexual, 19-year-old niece, Nicole Peloquin — the daughter of Russell's adoptive sister, Barbara Jane Peloquin — alleges that "The Fighter" director inappropriately groped Peloquin during a super-awkward exchange at a Florida gym on Friday.
Also read: Mark Wahlberg Falls Out With "Fighter" BFF David O. Russell
Peloquin — born Nicholas — told a Broward County Sheriff's Office deputy that the bizarre incident took place in the gym at the Embassy Suites in Deerfield Beach, Fla. (Russell is currently editing the Weinstein Co.'s "Silver Linings Playbook," starring Bradley Cooper.)
According to Peloquin's testimony, 53-year-old Russell offered to help Peloquin with ab exercises, during which Russell's hand hovered above Peloquin's "private parts."
Better grab the brain bleach, because it gets even worse.
Peloquin (pictured, in a photo from TheSmokingGun.com) — who has not yet undergone male-to-female gender-reassignment surgery — described "the hormones to increase [her] breasts" to Russell, at which point the director slipped his hands under Peloquin's shirt "and felt both breasts," the police report (see below) reads.
Peloquin told the deputy that she felt uncomfortable during the groping, but did not tell Russell to stop. She did, however, subsequently tell her mother that Russell put the moves on her in the 
gym.
Russell confirmed the exchange during his own interview with the detective, claiming that Peloquin was "acting very provocative toward him" during their workout, and that Peloquin invited him to feel her breasts.
Russell told police that he was "curious about the breast enhancement."
Russell's spokesperson, Cynthia Swartz, told TheWrap in a statement, "David O. Russell emphatically denies any wrongdoing and has cooperated fully with the authorities."
Per the police report, Russell told the deputy that Peloquin told him that one of her breasts is larger than the other. Oh, and that Peloquin made him "pinky swear" about the breast-touching.
And you thought your interactions with relatives over the holidays were uncomfortable?