You could do an offline exchange, where he gives you cash and you sell him BTC in exchange for that cash. You could set up a wallet for him, and transfer BTC from your wallet and existing amount to that BTC wallet. Could keep it offline or online, either way, and thus he's now purchased legally BTC from you. You could agree on the price set and there's nothing illegal about it, could be a market rate you both agree on, or could charge him higher for the liquidity and work.