He's completely fictionalized the setting. Nothing here has any connection with reality that we can discern, except that he (somewhat) knows Kate and feels an attraction to her. We furthermore know that he does not invent fantasies that are inconvenient to him, e.g he believes he is at the head of a global conspiracy, rather than being targeted by one.
In other words, this fanfic is what he "wants". I doubt he's a pedo though, since he spends so much time lusting after grown women: He probably just imagines a miniature, three-foot-tall Kate when he's concocting these.