The incident happened in Newburgh.
City police say 17-year-old Christopher Johnson, of 95 West Van Ness Street is charged with first-degree criminal sexual act and first-degree sexual abuse.
Police say they were notified on Monday of a possible sexual assault on a child at that address, a daycare center.
The victim in the case was apparently a young child, being watched at the home by the suspect's mother.
Johnson was arraigned Tuesday and is being held on $25,000 bail. Both charges are felonies.
The suspect's grandmother, Cathy Johnson, tearfully defended the child she raised to Eyewitness News Wednesday.
"I'm very upset," she said. "Because I know he didn't do it."
Police say the incident also happened Monday, at the family's house, while Cathy Johnson was babysitting a set of 7-year-olds twins. She says one boy wet himself, and she told her grandson to help him change his clothes.
Cathy Johnson had operated a daycare out of her home for years. In 2005, she gave up the business, but occasionally cared for the twins, whom she's babysat since they were babies.
As a 12-year old, Christopher Johnson was accused of molesting another child. His mother had no comment, but Cathy Johnson says her grandson is learning disabled, and that both incidents stemmed from disputes over non-payment for babysitting.
"He's a good boy," she said. "He's hyper, and he gets very nervous."
Police are encouraging anyone whose children have attended this daycare, or anyone with any information that may be helpful regarding this case, to contact Detective Roberta Goodman at 845-569-7512, or Lieutenant Detective Patrick Arnold at 845-569-7508.
