Now, I take this rumor with a grain of salt because my dad is a compulsive liar.
Now, about fifteen years ago my mom went through some mental problems, and it culminated in a mental breakdown during which she became obsessed with a number of conspiracy theories and became very paranoid (seriously, it was bad). I strongly believe my dad, for the most part, was just feeding into her paranoia because it amused him - he's kind of a huge fucking dick in many ways. He told her a number of ridiculous things (about having mob ties, about being involved in government brainwashing operations, what have you), but one story he told her around this time, she still insists she believes is 100% true despite having recovered from the breakdown.
Basically, my godfather, my dad's friend since highschool, was a minor local celebrity. No one outside of a few people from my hometown who lived there in a short period of time in the late 70s/early 80s would know who he was these days, but back in the day he apparently was kind of a 'small' big deal. My dad apparently told my mom that my godfather was invited to parties for the city's elite, and my dad tagged along with him to a few of them. According to my dad's account of these parties that he divulged to her decades after the fact, they were full of drugs and sex, and they would auction off young kids to the highest bidder. According to my mom this was all related to the Franklin scandal.
My mom says she remembers them getting invited to things back then that they were very hush-hush about, but when she would ask to go with them my dad would refuse to allow her to come. I personally think it's because my dad is a philandering asshole and he didn't want his girlfriend there so he could hit on/sleep with other women. My mom got deep into the Franklin scandal and was talking about it to anyone who would listen, and then my dad brought this up. As I said, I strongly believe he was just fucking with her, he's never told anyone else in the family anything along these lines.
My mom was really fargone mentally for a little while there as well, it's not entirely impossible that she imagined all this.