My Wife's Sexually Abusive Father Expects a Normal Relationship With My Daughter

Throw away account, because obvious reasons. It's also a bit of a long post.I'm at a loss. We relocated cities because of this, thinking that maybe the distance would solve the issue, but it hasn't. It has made things somewhat easier, as we're not expected to see him all the time, but when the family comes to visit/we go visit, he's still there, and he still tries to get to know my daughter.Backstory:My wife and her three sisters were sexually abused growing up. Not "hard core" abused or whatever(think penetration), but there was inappropriate touching, tickling, asking the kids to touch him because he was "lonely", he pinned one of my wife's sisters to the wall by her throat in anger, and, as icing on the cake, got arrested for snipping pics up ladies skirts(not in America, and the charge didn't come back with him), but there was no denying it. (This particular event happened a little over three years ago, so fairly recently)Fast forward to now. My wonderful wife and I have a beautiful 2 year old daughter. My wife's father is still married to my wife's mom, and her two youngest sisters still lives with them in their family home.We have no problems what so-ever with our daughter knowing her grandmother or her aunts. However, along with them comes the sexually abusive father, who still denies any wrongdoing to the kids as they grew up. And we are at a complete loss of what to do. Her mom has a super busy job, and she works at least 60 hours a week, we're thinking so she can just forget the problems, and pretend they never happened. How her two sisters still live at home is beyond me, but they do. One is still in highschool, and the other in college. By all means, he should carry the "sex offender" title after his name. But he got lucky.We've tried just going over there and keeping an eye on him with our daughter, but it makes the whole experience a living hell, because we don't want her to grow accustomed to things. And it makes it impossible to enjoy the rest of her family, because we're so on-edge the entire time he's there.If he was divorced from my mother-in-law, it would be a complete estrangement. No contact, no need to see him again, unless he came clean and admitted his wrong, and for sure showed signs that he had changed, and wasn't still viewing pornography(where it all began). Even then it would be maybe once a year...at best?​But here we are, trying to wade through keeping a relationship with her mom and sisters and grandparents(who all live in the same city) and who all seem to just sweep the past under the rug for a sense of "normalcy", I suppose as a way to cope. We are now pregnant with our second child, and we are truly at a loss of how to deal with this situation, and have met no-one who can relate. I know we probably could/should go to counselling, and we definitely need to have a sit down discussion with him to just say what exactly we feel, but I must admit I'm a bit stubborn when it comes to "needing counselling", and honestly I'm absolutely terrified of the extended ramifications of basically excommunicating him from our family, like what that would do to my other in-laws that still live around him/are involved in his life.I know I just need to grow a pair and talk to the man, but goodness. He is also a very prideful, manipulative man who knows how to weasel his way into and out of things very well.Thank you for reading. Any advice would be wonderful. Have any of you out in the redditspace experienced a similar situation? How did you handle it/cope with it?​ via /r/Parenting http://bit.ly/2MsrYT3