Shawn Wayne Hughes, 32, was arrested Wednesday and charged with illegal payments in connection with placement of a child and two counts of possession of drugs, the Kingsport Times-News reported.
Police said Hughes allegedly agreed to sign over his custodial rights to a 75-year-old woman, identified as the grandmother of Jessica April Carey, 27, Hughes' girlfriend.
Carey was jailed for alleged aggravated child abuse and neglect, police reports state.
Hughes approached the older woman Monday and asked for $2,000 to bail Carey out of jail, but she refused.
He returned to her house Tuesday to pick up one of his children, a 6-year-old girl, and the woman said Hughes tried again to get her to hand over bail money, but she again refused -- and instead called police after Hughes left with the girl.
While she was speaking with police, Hughes allegedly called her and offered to sell the child and sign over his legal custody to her for $1,500. Under police direction, the great-grandmother agreed to the offer and set up a meeting place with Hughes for Wednesday.
Hughes, however, was met by police and arrested. He was booked into the Kingsport city jail and was arraigned Thursday, with bond set at $16,000.