Sounds like he has either been watching too much TV...or too much of his Daddy in action with his mom! lol.
I also think it is dangerous for you to watch a boy in such a situation who is making comments like this continually. If something happened or if he said it did just to get attention (- he seems rather impressionable),...it would possibly make you look bad and endanger your family's wellbeing.
Tell his Mom and ask her to handle him, it seems very young for a child to speak like this , could there be any other reason? It seems like a good idea not to babysit,him