Male prostitute Trent Bolte, 28, allegedly told FBI prosecutors that the dad-of-two introduced him to his daughters after paying him for sex.
The fiend promised to introduce Bolte to daughters Bella and Celeste – who he would go on to kill in a twisted bid for a new life – if he didn't turn out to be a "psycho".
Bolte claims he had a 10-month fling with Watts, which ended shortly before the murders.
The affair started when Watts messaged Bolte on an app – but claimed he was straight.
Bolte asked why he was messaging a gay man – and Watts replied "I don't really know if I'm straight or not".
They soon met up at Bolte's home – where Watts "ripped" the escort's clothes off.
Bolte said: "I performed oral sex on him, he performed oral sex on me, after that there was intercourse and he pretty much panicked and then didn't say much and left."
Soon after their first encounter, Watts introduced him to his daughters.
He previously vowed: "If you turn out not to be a psycho maybe you can meet them."
Bolte told cops they stayed together at a remote Wyoming cabin – and that Watts even paid for him to get lip fillers.
Mum Colleen told investigators Watts "paid him $250, $80, and $60 on separate occasions".
Watts was sentenced to life in prison on for murdering his pregnant wife Shanann, their daughters – four-year-old Bella and three-year-old Celeste – and unborn son Nico.
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