I think that reference comes from Suetonius where my translation calls it a "foul rumour" (Julius Caesar 2). But later on Suetonius treats this as a fact "a clean life unblemished save by the occasion of his iintimacy with Nicomedes" (Julius Caesar 49).

Furthermore Suetonius quotes the poet Calvus Licinius who wrote verses about this and relates that other contemporary figures attacked him over that (calling him the "queen of Bithynia").

"His soldiers were aware as they sung this song during his triumph: "the Gauls to Caesar yield, Caesar to Nicomede, Lo! Caesar triumphs for his glorius deed, But Caesar's conquerer gains no victor's meed."