According to bossip.com:
According to TMZ reports:
Kevin Clash — the voice of Elmo — agreed to pay his accuser $125,000, with one string attached — that the accuser recant his story that Clash had sex with him when he was a minor … TMZ has learned.
TMZ broke the story … Sheldon Stephens alleged he was only 16 when Clash began a sexual affair with him. Clash has acknowledged an affair, but insists it started when Stephens — now 23 — was an adult.
Multiple sources tell TMZ … hours before Stephens recanted his underage sex allegation, a settlement was struck between the two parties. Under the terms of the settlement, Clash agreed to pay Stephens 125k. But the settlement then provides the following: