A witness saw Joseph Cantorna's alleged actions with the 9-year-old victim around 9:45 a.m. in Lakeside, Sgt. Brent Strahm said.

The witness intervened and called the Sheriff's Department, Strahm said.

Sheriff's deputies said Cantorna is mentally challenged and lives in a halfway house nearby.

Because of his age, 10News will not identify the 9-year-old victim, but he spoke about the strange incident that happened when he went outside to play.

"It was freaky... He started touching me where he was not supposed to and then he tried to expose his privates," said the boy. "I rode back to my dad and he was standing right there. I told him everything."

The boy's father then confronted Cantorna before escorting him back to the halfway house.

"He tells me that he likes kids," said the father. "That's basically what came out of his mouth."

Neighbor Tom Walko said he hopes Sunday was the last time they'll see Cantorna near their children.

"This individual they arrested, I saw him walking down our street a few days ago," said Walko. "We just passed the new Chelsea's Law and we want to make sure this guy is an example of that."

The incident could also spark a change in where registered sex offenders are allowed to live.

"Why was this man walking around my neighborhood, why?" asked neighbor Kent Kopperud.

Kopperud put the question to County Supervisor Dianne Jacob's office, which has asked the Sheriff's Department, the District Attorney's office and the county code enforcement office to look into the group home to see if it is in compliance with the law.

"So long as a registered sex offender is not on parole or probation, he or she can live anywhere they choose," said Phyllis Shess, Director of Sex Offender Management for the county.

Cantorna served 90 days for a prior conviction in 2009, for inappropriately touching a child.

Cantorna was booked into San Diego Central Jail on suspicion of committing lewd and lascivious acts with a child. Jail records showed bail was set at $100,000. Cantorna is scheduled to be arraigned Wednesday afternoon.