I’m going to guess that this is how it broke down:
Rockstar originally had explicit sexual content in Grand Theft Auto.
Before it gets released, they decide to cut it. However, in the tradition of lazy programmers everywhere, they decided to perform the equivalent of “commenting” it out. They left the models and the situations in the game code, but the content wasn’t accessible in the game itself. The game was rated M, for Mature, meaning that (Thanks, mom and dad!) anyone under the age of 17 is not allowed to purchase it.
Along comes the PC version and quicker than my friends end up in the sky cage at Nexus, some enthusiasts “hack” the original game code and find the explicit content. Then they release a modification for the game that allows you to see and experience this explicit content, in game.
Now, why does this warrant a federal investigation? There are more important things to investigate, I’m sure. Come on New York, let Hillary know about what you want investigated instead of “smut in videogames.”