http://www.animenation.net/blog/?s=legal+status+loli-thanks to Google ...

/and obviously I don't know anything about this person's credentials or reliability.
It could still be tried as obscenity in your community. That's probably true of any pornography, but generally people frown on other people's children having sex. Oddly, they seem to be fine with it when they become grandparents at 30. "Boys will be boys" being one half of a double-standard related to that... x.x
Still, even if it wasn't illegal, be it as loli or obscenity, the damage it would do to his reputation would be virtually irreparable, if not completely so. /Then again, that would be true even if it didn't go to court and she just spread nasty rumors.
^Re: Boobs: You've never met an adult girl with an A-cup*, have you? Hell, the reverse is true, too. When I still worked in food during college, you'd see 14-16 y/o girls w/ C+ sizes. Friggin' scary. You have to rely on other indicators of age, which aren't fail-proof, either.
*Code for "mostly unnecessary support"